GAP insurance and VT HP Finance

[des8]

Re GAP insurance cancellation: most insurers allow a pro rata refund of premiums paid and do not calculate on a short term basis.
The insurers will only accept a cancellation notice from the insured, not the finance house.
So for any one to benefit from any possible refund the insured needs to give notice

[Amethyst]

There's only 2 months of cover left, the premium was £299 and covered for 4 years ... so I doubt any rebate from the insurers is particuarly worth worrying about ( about £12 ? )

[DaniRTurner]

Thank you des8 Amethyst

Hopefully if R0b gets chance to look through the agreement he can tell me whether or not I would need to pay the £115 for the gap from the balloon payment

fingers crossed!

[R0b]

I can't really give you a definitive answer to this one, only what I think and the possible scenarios. Having read the agreement I can see there is a statement on page 3 the right which says the following:


As I mentioned previously, if this agreement was truly a multiple agreement then there would have to be separate documentation for both the vehicle credit and the GAP insurance. Assuming the GAP insurance is a credit arrangement then just like any other credit agreement, FCA would have been obligation to provide you with certain information that sets out key details of the insurance which is usually contained in a document known as 'Pre-Contract Information Sheet' which would you would have (or ought to have) been given a similar sheet in relation to the HP side of things.

Unfortunately, I can't see what Clause 13.2 refers to because there are no terms and conditions other than what's set out in the document. Can you confirm if you ever received any terms and conditions in addition to the document you have uploaded? If not, then your argument is that those terms were not incorporated at the time of signing and therefore the you do not owe the remaining GAP amount.

However, playing devil's advocate I wonder whether the GAP insurance is a separate agreement (or even a credit agreement) at all, particularly if the insurance had been paid in one lump sum by FCA on behalf of you. Even if FCA paid the GAP insurance in one lump on your behalf, they have then incorporate that debt by multiple instalments under the HP agreement, and when you look at the Consumer Credit Act and the meaning of "credit" under Section 9, it says:

"In this Act "credit" includes a cash loan, and any other form of financial accommodation."

So, depending on which side of the fence you sit on, it could be argued that the amount relating to the GAP insurance is either rolled up into the HP agreement as one, or that it is truly a separate credit agreement in which case if it is then without having provided you with the separate documentation then the 'separate agreement' has been improperly executed and not enforceable without a Court Order. Then again, one could argue its not even a credit agreement at all!

Do you see the difficulty in all of this and why its not so straight forward?

I can't really tell you whether or not to pay it, the judgment call has to be made by you in whether you want to fight it. The email you received from FCA suggests the GAP is rolled into the HP agreement because the rest of the balance is incorporated into the balloon payment. I think you should try to contact the provider of the GAP policy and make inquiries as to any rebate amount that might be available for cancelling (anything is still something) and then you need to decide if it is worth the hassle of defending the remaining GAP balance or if you should simply pay it and get rid of it.

Even though legally, you might be entitled to refuse payment of the rest of the balance, sometimes the time, effort and resource of having to defend it and have it hanging over your head can be outweighed compared to paying it off. I've already given my view of things but I'm afraid I can't give you a guaranteed answer to this one. There is a risk in defending your position but its a risk you have to take yourself with your own decision.

[DaniRTurner]

I can confirm I never received any terms and conditions other than the HP agreement uploaded. Thank you for your advice, i will try to dispute it when they charge me but if it becomes too much hassle I’ll just pay it off.

Thanks again

[R0b]

In that case, your starting position is to outline to FCA that you received no other documentation except for the one that has been supplied and as far as you are concerned, the GAP insurance is rolled into one agreement and your single monthly instalment further confirms that there is no separation between the GAP and HP credit. You could also refer to the email you were sent that confirmed the GAP was incorporated into the balloon payment, meaning that the GAP together with the HP credit was the total price under the agreement and having paid the 50% amount, your liability is discharged and no further monies are owing.

[DaniRTurner]

Hi R0b Amethy5t

I requested some advice from you in September following VT of my finance car. I handed the car back in November and was sent a letter to say I owed over £700 in damages, collection fees and GAP insurance. I wrote to dispute this charge, please see attached letter. I did not receive a response to this letter, but rather another request for payment of the £700+. I sent the letter again by email and recorded delivery, and yesterday I received a response from them (please see attached).

They have, as a 'goodwill gesture' agreed to waiver £490 of the charges, leaving me to still pay £307.27. I had agreed to pay £53.00 for the rear bumper as I accept it was beyond fair wear and tear. I have pictures of the car in a near immaculate condition.

They are still trying to charge me for a collection fee which, as you can see from my previous letter to them, I had disagreed to pay.

In the body of the email they sent to me yesterday in the Adjusted Liability letter, they had said:

"Thank you for your emails and please accept my apologies for the delay in responding.

Please note that the amount of £786.27 has now been reduced to £307.27. We wrote to you on 3rd December to advise of this in response to your dispute.

In regards to your original email please note, the law governing VT’s refers specifically to costs resulting in damage or misuse. The relevant section of the law is the CCA 1974, Part V111 section 100 and states the below:
(4) If the debtor has contravened an obligation to take reasonable care of the goods or land, the amount arrived at under subsection (1) shall be increased by the sum required to recompense the creditor for that contravention, and subsection (2) shall have that effect accordingly.

Reasonable care is measured by the BVRLA standards of fair wear and tear and you are liable for any damage exceeding this.

Your outstanding liability is £307.27. Please contact our collections team on 0333 207 5582 who will be happy to set up a payment plan".

Please could you offer some advice as to what I could reply to them, as I do not want to pay for the collection charge and I am not sure if I should even be paying the GAP insurance (MultiPart Settlement) either.

Thank you in advance

[R0b]

Well, first and foremost, the letter does not make clear at all what charges have waived. Is it solely the damage charges, or a combination of the damage charges plus the GAP insurance and the collection fee?

I think you are well within your right for them to justify and explain (a) what specific charges have been waived and (b) why or on what basis they have decided to waive those charges?

The GAP insurance I have previously explained so you decide on that one and the collection charges, that's well documented on here as well. So the reality is that you can continue to maintain paying for the bumper as falling outside wear and tear.

In relation to the reasonable care standards argument, you could argue that the BVRLA standards are not appropriate in this instance because they do not make an allowance for the age of the vehicle. Unless they have updated the fair wear and tear guidance, the standard is restrictive in that the same requirements apply to a vehicle that may be 1 year old to that of a 5 year old car. It is natural for a car that is 5 or so years old to have sustained some damage which may be, alloys, stone chips, soiling on seats if you have kids etc. The charges levied would seem to put FCA in a better position than they ought to be. FCA be in a position known as betterment.

So I would suggest your letter incorporates the following:

1. Ask FCA to itemise the charges that have been waived and ask them to explain how they have arrived at that decision. It would be reasonable to seek a copy of the BVRLA standards used as well as a copy of the damage report if you don't already have that.
2. Set your position on the GAP insurance
3. Set your position on the damages, and paraphrase the point about using the BVRLA standards. A more appropriate standard would be the CAP HPI standards (see attached) which acknowledges that as the car ages, it is likely to sustain further damage and the conditions account for that.

[DaniRTurner]

Hi R0b

Thank you for your advice. I wrote to them last week, please see attached. Today they have sent the following response:


"In regards to the waived charges, these were due to unclear images from the inspection report, therefore waived as goodwill.

Please note the GAP insurance charge is listed on your agreement as part of your monthly payment however it is a separate agreement as per your terms and conditions. Therefore the total price is not inclusive of this figure.

In regards to the Consumer Credit Act, this does not cover the collection fee. As such your outstanding liability is £307.27. Please contact our collections team on 0333 207 5582 who will be happy to set up a payment plan.

Or if you wish to dispute this further please raise a complaint with the BVRLA using the link below.

We look forward to hearing from you soon".

I don't need to raise a complaint with BVRLA as they have waived the charges for the 'damages' and I have agreed to pay for the damage to the bumper.

I also was not given a separate agreement for the GAP insurance and was therefore not given any terms and conditions for this. I also don't want to pay the collection fee!

I want to keep disputing the charges but just wanted to ensure I'm using the right information. Would you just mind offering a bit of advice as to where I can go from here please?

Thank you in advance

[R0b]

I'll have a think and see if I have any examples on how to respond regarding the GAP insurance.

Just to clarify, did you get any pre-contract information about the HP agreement itself and did that state anything about added products like GAP insurance?

[DaniRTurner]

Hi R0b

Thank you. No I didn't, the only documentation I ever received was the Hire Purchase Agreement which I've uploaded previously - I took out the agreement on the same day I walked into the store so there was no sort of letters sent in between

Thanks again

[R0b]

Are you able to upload a clearer copy of the HP agreement both the first page with the table of payments on there and the page where the clause for additional agreements is mentioned?

[DaniRTurner]

Hi R0b

Please see attached

Thank you

[DaniRTurner]

Hi R0b , just wondering whether you might have had chance to look over the documents id sent? Ive not yet sent a reply to FCA following their last email to me a couple of weeks ago. Thanks

[R0b]

Hello

Sorry I haven't looked at it, but I have seen that document eslewhere and I think you are in a similar position to another person on this thread. I did post an example response on the link below (see post #22) which, except for the part about the GAP insurance period of time, a large part of it probably relates to you and I think you can draft something similar to that.

To get some background, I would recommend you read the whole thread and if you want to post up a draft here, happy to look it over.

FCA VT issues