GAP Insurance & Voluntary Termination

[GAPING]

Hi,
I have invoked a Voluntary Termination process with GMAC Finance. Following the advice on this forum most things have gone well. However, I have been asked to pay approx. £ 260 for GAP insurance. Checking my original agreement, the original cost of GAP insurance plus interest, is approx. £500.00. This amount was included in the monthly repayments. GMAC maintain that the GAP insurance was paid in full at the start of the repayment agreement and therefore I owe them a balance of £ 260.00 (approx.). Is this correct? They have also quoted the following from the agreement document: "Please note that the Termination and Repossession rights set out in the notes above only apply to that part of this Agreement which relates to the vehicle. The figures shown in the notices do not include any amounts payment to any GAP_ insurance or warranty you have purchased." Is this also correct?
From what they are telling me I fear they may be correct. However, as they tried to hoodwink me into signing their Voluntary Termination pack I do not trust them and would welcome some independent advise.
Hope you can help.

[R0b]

Hello

You would have to upload the contract and the terms and conditions to understand your position (personal info removed). However, just because something might be written into a contract does not necessarily mean that it is enforceable, particularly if contracts such as HP agreements are regulated by legislation and contradict those provisions.

Courts have always stated that its not about the form but rather the substance.In other words, you have to look at how the contract was created as a whole and not, as GMAC suggest, rely on specific words (but that's not to say a court might come to the same conclusion anyway). Normally when GAP is sold, it is done by the sales advisors of dealerships as part of the whole package and which is incorporated consumer credit agreement, and forming part of the total price payable under the agreement in which you pay one monthly sum.

If the above follows your current situation then it is definitely arguable that the GAP is not a separate agreement and therefore is a form of credit part of the total amount under the agreement (which is then not recoverable if you have already paid 50%). If, however, the GAP was intended to be independent and separate from the consumer credit of the car, then they should have supplied you with a separate agreement with separate terms and conditions and you would be paying a separate direct debit.

However, only you can make that decision and take any risks that come with it i.e. GMAC going to court, though I've yet to see them do that it is not impossible.

Hope that helps

P.s. you can usually source GAP insurance for 1/3 less if you shop around independently than taking up the offer from the dealer.

[des8]

Re GAP insurance, you can write directly to the insurer to cancel it.
Most (not all) insurers allow a pro rata return of premium less a small administration charge.

[R0b]

Re GAP insurance, you can write directly to the insurer to cancel it.
Most (not all) insurers allow a pro rata return of premium less a small administration charge.

This too, and that can be an argument used by GMAC to say its a separate agreement, though I would argue differently!