Voluntary Termination & GAP insurance

[Groundednearthed]

Hi

I have just notified my finance company that I wish to VT my PCP agreement. I have almost paid 50% and i owe about £200 to pay that off, however they have advised that I am not able to terminate my GAP insurance ?

Does anyone know if this is correct...why must I have an insurance for a vehicle I will no longer own.

Thank you in advance aw:

[R0b]

Re: Voluntary Termination & GAP insurance

hi Grounded,

Do you have a copy of your PCP you could upload or could you confirm whether the GAP insurance was included in the total amount payable under the agreement e.g. was it inlcuded in your monthly instalment r did you pay a separate amount?

[des8]

Re: Voluntary Termination & GAP insurance

What type of GAP insurance do you have:
1) finance GAP
2)return to invoice GAP
3)car replacement GAP

GAP insurance is normally a one off premium for a three year period
If there has been a claim, there will be no refund.
If it is a straight cancellation it will depend on the policy wording as to whether there is a return of premium (some do some don't).

If the vehicle is returned the policy, technically remains in force as it is not cancelled, but it will cease to have any effect as you no longer have the vehicle and so there is no insurable interest.

[Groundednearthed]

Re: Voluntary Termination & GAP insurance

Hi R0b

Its a finance GAP and included in my monthly amount payable

[Groundednearthed]

Re: Voluntary Termination & GAP insurance

Hi

Basically what they are asking me to pay is

VT liability £451.48 (dont what that is)
EarlySettlement £294.53 ( is that usual?)

On my insurance they are asking for:

Total outstanding £307.32
Less rebate for early settlement -£12.79
Amount to pay £294.53

Does this sound right to you ?

Lorraine

[R0b]

Re: Voluntary Termination & GAP insurance

I am not sure why there are referring to early settlement because voluntary termination and early settlement are two different things. You get a rebate on early settlement but you don't get a rebate on VT.

the VT liability I suspect is the damages of the condition of the car
Early settlement sounds like what you have to make up to the 50%

I would argue that you do not have to pay for the insurance. Since you didn't answer whether you paid the insurance on a separate payment each month or it was lumped together with your monthly instalments I am going to presume the latter. In that case it would likely fall as part of the total amount payable (assuming your total amount payable has been calculated like that) and therefore only need to reach the 50% of that amount.

Even still, if they disagree then you are only liable for the total amount payable excluding any breach of the agreement or compensation (GAP insurance being the compensation for early termination).

Who is the finance company? It would be helpful if you could provide any letters or correspondence and the Agreement if you have it to understand your position better. You could take a photo with personal information removed and email it to Kati@Legalbeagles.info and she can upload it for you.

[des8]

Re: Voluntary Termination & GAP insurance

It is most likely that the insurance element is cancellable.

I'm assuming the GAP insurance premium has been included in the finance packet, and the finance company paid the insurer's premium upfront.
The rebate for early settlement is the rebate you would get from a finance house for early termination of a loan.
What you need to do is contact the insurers directly if possible, and find out if there is a return of premium for early cancellation.


Insurers and providers who fully support the ABI Good Practice Guide forGAP insurance should provide you with a premium refund (minus administration charges) for cancellation of policies sold after 30 June 2012. You can find a list of these insurers on the ABI’swebsite: http://www.abi.org.uk/Information/Co...insurance.aspx

[Groundednearthed]

Re: Voluntary Termination & GAP insurance

I am not sure why there are referring to early settlement because voluntary termination and early settlement are two different things. You get a rebate on early settlement but you don't get a rebate on VT.

the VT liability I suspect is the damages of the condition of the car
Early settlement sounds like what you have to make up to the 50%

I would argue that you do not have to pay for the insurance. Since you didn't answer whether you paid the insurance on a separate payment each month or it was lumped together with your monthly instalments I am going to presume the latter. In that case it would likely fall as part of the total amount payable (assuming your total amount payable has been calculated like that) and therefore only need to reach the 50% of that amount.

Even still, if they disagree then you are only liable for the total amount payable excluding any breach of the agreement or compensation (GAP insurance being the compensation for early termination).

Who is the finance company? It would be helpful if you could provide any letters or correspondence and the Agreement if you have it to understand your position better. You could take a photo with personal information removed and email it to Kati@Legalbeagles.info and she can upload it for you.

Hi

Its PSA finance T/A Citroen Financial Services.
I did message back to say that the GAP was in with the finance.
I will try and upload the letter they have sent in response to my VT notice.

Lorraine

[Groundednearthed]

Re: Voluntary Termination & GAP insurance

Hi R0b

I have hopefully attached what you need

Thanks

Lorraine

[des8]

Re: Voluntary Termination & GAP insurance

PSA finance issue a leaflet about GAP insurance
This is what it says about cancellation:

Will I get a refund if I cancel my policy?
You have 30 days from receipt of your documentation to reviewyour policy during which time you can cancel and receive a fullrefund providing no claim has been made.
After this time you cancancel your policy and you will be refunded on a pro-rata basisproviding no claim has been made.
An administration fee of £24 willbe deducted from your pro rata refund. E.g. If your policy costs £449and you cancel after 18 months you will receive half your premiumback less £24. In this example you would receive a refund of £200.54.
If you cancel your policy during the additional free cover period,i.e. in months 37 to 60, no refund will be due.I
http://www.peugeot.co.uk/media/peugeot-fsi-leaflet.pdf

[R0b]

Re: Voluntary Termination & GAP insurance

Well first of all the heading of the letter is very misleading, its not early settlement its voluntary termination.

Secondly, you need to work out exactly how much you have paid, cross reference that with the sum in your agreement under the termination part and that will be how much you need to pay. The GAP is included but as Des says, you could be due a refund on that, might not be much though.

Once you have worked out what you need, I would suggest you send that by bank transfer with a reference so they know who you are, maybe an agreement number or customer number would do. Send a letter/email confirming you have made payment and what time, explain how you have worked it out and ask them to come collect the car. The agreement has been terminated already when you gave notice so it does not carry on, you just need to pay the 50% amount.

[Groundednearthed]

Re: Voluntary Termination & GAP insurance

Hi

Thank you so much for your help with this:

So both agreements HP an Loan were executed on 13/8/14

The amount of credit provided to me under each agreement was:

HP £14469.00
Loan £399.00

Interest @ 4.9% was charged for the duration of each agreement.

Opening balance @ the start was:

HP £21385.68
Loan £445.09

Including June I have made 21 payments of £233.14 = £4,895.94
My deposit was £5,250.00
Total £10,145.94

Half the amount payable stated on the agreement is £10,692.84 so i work out that leaves £546.9 to make it up to the half way figure.

In their letter they seem to have added the full interest for the total agreement which is £1,666.68

I have emailed to ask them to clarify what amount of interest they are adding, is it up to the termination ?but as yet I have had no reply.

By my reckonings regarding the GAP i am due a refund of £222.55 - £24 so i don't know if should take that off what I owe or request a refund?

Regards

Lorraine

[R0b]

Re: Voluntary Termination & GAP insurance

What do you mean by loan? Is this the GAP or something else because it looks strange and confusing as to why they would give a loan of such a small amount on a car. If the loan is the GAP are you paying by separate DD than your car or is it one monthly DD?

Putting the GAP aside for one moment and focusing on the HP, you seem to be correct in that the outstanding balance for that is £780.04


So according to Des8 you should be due a refund of that amount roughly. You should raise this with them and explain that if you are due a premium refund then they have failed to mention it and that is misleading so you would like them to give a full breakdown how they have come to that amount. Explain to them your calculations as you have set out above and give them 7 days to respond otherwise you will pay the money into their account based on your own calculations deducting the premium from the amount remaining to make up the 50%.

[Groundednearthed]

Re: Voluntary Termination & GAP insurance

Hi

They have referred to 'Loan' in their letter under the Insurance - Early Settlement Quotation that i sent you yesterday.

In this section they are advising that i only need to pay £294.53 to settle the 'insurance element' of my agreement. However as you can see in the letter they then go on to say "we have calculated this rebate in line with CC early settlement Regs"

So yeah it is very mixed up.

Regards

Lorraine

- - - Updated - - -

Sorry i forgot to add that I pay it all in one DD

[Groundednearthed]

Re: Voluntary Termination & GAP insurance

Hi again

I am a little confused. In your advice you state that i am due a 'premium refund' but i dont know what that is?

Half of the total amount payable is according to the agreement is £10,692.84 to date i have paid including deposit £10,145.94 which means I owe them £546.9. ?

Have I got this round my neck ??

The % DD for the GAP is £6.26

Im sorry im struggling to understand this :tinysmile_hmm_t2: