PSA VT - 4 Months Away from the end

[kjones1105]

Hello,

My wife has recently purchased a new car as we're expecting our first little one and she needed to get a larger car.

We were originally going to VT her car as we're over the 50% mark and I keep my Citroen C1 till the end of my agreement (March 2020) but BMW have offered us a good deal to do a straight swap and get a newer 1 series for myself.

This means VT'ing my car now and I asked PSA to give me the numbers.

They've quoted £623.27 for the insurance element to which I'm very confused at as I never took our insurance with them and £409.29 for the VT (I pay £135pm so this is about right).

Can someone explain what this insurance element and why it's so expensive?

Thank you,

Kevin.

[R0b]

Sounds like GAP insurance coverage which might have been added to separately to your agreement.

You are under no obligation to pay all of that moneyup front before you can terminate the agreement. YOu can terminate now but you would be liable for those amounts, however, the insurance element should be continued on a monthly basis because you are only terminating the HP element and I'm pretty sure in PSA contracts they say that if you have additional products like GAP then they are to be treated as two separate contracts, so if they are demanding full advance payment for the rest of the remaining months, that's tantamount to a fundamental breach of contract sufficient for you to terminate and pay nothing further.

Before deciding to go in heavy handed, you could write back to PSA and say to them, the payment of the remaining VT balance does not preclude you from terminating the agreement, it simply means you remain liable for the oustanding amount. Also if the GAP is treated as a separate contract then demanding the full remaining balance is a breach of contract because your contract (presumably) says you agreed to pay X each month.

I would suggest you get them to confirm whether they are accepting your temrination notice, and are they still demanding the full remaining balance for the insurance product.

See what they say and then you can take your next steps.

[kjones1105]

OK, that makes sense and I do remember adding on GAP insurance.

What I don't understand is why it's so much?

I pay £135 per month and this includes the insurance so if my agreement naturally ends in 4 payments, how come it's so high? Only reason I can think of is that they're charging me for the whole insurance period (£623.27 / 36 = £17).

Very confused by this.

[kjones1105]

So I've just spoken to PSA and it's indeed for GAP Insurance & the damage protection that I took out.

Little did I know that there was still going to be a balloon payment even if I hand the vehicle back of £553 to pay off both these insurances. This was never ever explained to me. My understand that it covers the 36 months and that's it!

A little bit annoyed at this.