Car Finance transfer / Insurance question

[fakeafaik]

Hello all,

New to this forum & hoping someone can help with this. FYI I live in Northern Ireland.

Basically my mum had a car with finance still owed on it (approximately £2,500 left with DD payments of £105 p/month). She then got a car on DLA & was considering handing the car back to the finance company. Around the same time, my own car starting giving me trouble.

So we decided I would take over the car. At the time we rang up to see if I could simply get the finance moved over to my name. Turns out that wasn't an option.

We decided to transfer the car ownership through dvani from my mum to me. I have had my own fully comp insurance on the car. And I have been paying the monthly payments from July 2012.

Essentially, I just want to know, in the event of a worst case scenario & I wrote off the car, would there been any difficulties with the finance company & the insurance.

Since technically, the finance company still own the car, would the insurance company say my cover was void? Any thoughts would be much appreciated.

Thanks in advance!

[miliitant]

Re: Car Finance transfer / Insurance question

all that would happen would be the insurance company would pay the finance company direct the current market value of the car. if that fails to cover any shortfall to the finance company, the person who signed the credit agreement would still be liable for any shortfall. that's why the finance company offer an extra insurance policy called GAP normally when you sign the agreement to cover this shortfall. it depends now on the amount of finance outstanding and the current market value of the vehicle

[fakeafaik]

Re: Car Finance transfer / Insurance question

The finance owed would be in the region of £2,000 now. The car is 2007 Ford Focus 1.8 with c.40k miles on it. I reckon the market value would be £5,000.

So, just to confirm, even though the finance is in my mums name & the car insurance is in my name, there wouldn't be a problem.

Assuming the market value is £5k & the finance owed is £2k. If the car was written off. The insurance would pay the finance company £2k & give me £3k.

I was just worried the insurance company would say, the car wasn't mine to insure & not pay out.

[miliitant]

Re: Car Finance transfer / Insurance question

It is the person who is nsured to drive the vehicle, not the other way around. Thats why for example you brother can drive your car on a third party basis if he has fully comp on his insurance, you need a fully comp insurance on the vehicle though. Most car finance agreements insist on it. Why dont you just phone your insurance company and confirm it would be the simple answer. The vehicle is insured as to the road traffic act, thats all that is important

[fakeafaik]

Re: Car Finance transfer / Insurance question

to be honest i'm a bit concerned they'll cancel my insurance or something :s

[miliitant]

Re: Car Finance transfer / Insurance question

As stated, you are insured to drive a vehicle, that can be any vehicle, you do not have to own it to be able to drive it. You would not even to be able to take a hire car in that sinario. As long as the insurance company are aware of the vehicle you are driving, you can have a block policy to drive any vehicle. Why dont you just phone an insurance broker and say you are considering changing your insurance provider as an excuse and ask the question

[fakeafaik]

Re: Car Finance transfer / Insurance question

sound advice. i'll give that a go on Monday.