Car is insurance write off what about the finance company?

[Essexboys]

Hi all, firstly I would like to say hello to you all as this is my first post.
cut a long story short, my car has a finance agreement over 4 years, I have paid every month without fail for the last 3 years, unfortunately this last few days my car caught on fire of the dealership I had taken it to for a service, the mechanics there fought the fire with fire extinguishers, to no avail, the fire brigade managed to put the fire out but the car is completely burn out, so I would assume it is a total loss.

i called the finance company to let them know what had happened, and to ask them if I could stop paying the finance until I get paid out, when I get paid out I can phone for a final settlement figure and pay the finance off, they didn't like that idea and have said I need to keep paying, my repayments are £340 per month and I need the money now to buy a cheap car to allow me to get to work. Where do I stand legally if I stop the payments now while this gets sorted out.

the other question I have is this, if the insurers did not pay out, where does that leave me? Would I still be liable for the outstanding finance?
thanking you all in advance for all, and any advice
essexboys

[nemesis45]

Re: Car is insurance write off what about the finance company?

Hi all, firstly I would like to say hello to you all as this is my first post.
cut a long story short, my car has a finance agreement over 4 years, I have paid every month without fail for the last 3 years, unfortunately this last few days my car caught on fire of the dealership I had taken it to for a service, the mechanics there fought the fire with fire extinguishers, to no avail, the fire brigade managed to put the fire out but the car is completely burn out, so I would assume it is a total loss.

i called the finance company to let them know what had happened, and to ask them if I could stop paying the finance until I get paid out, when I get paid out I can phone for a final settlement figure and pay the finance off, they didn't like that idea and have said I need to keep paying, my repayments are £340 per month and I need the money now to buy a cheap car to allow me to get to work. Where do I stand legally if I stop the payments now while this gets sorted out.

the other question I have is this, if the insurers did not pay out, where does that leave me? Would I still be liable for the outstanding finance?
thanking you all in advance for all, and any advice
essexboys

HI welcome to LB.

I'll try to get some help for you.
[MENTION=71570]R0b[/MENTION] can you help please.

nem

[seduraed]

Re: Car is insurance write off what about the finance company?

Check your car insurance policy a geat many have courtesy car included . ~If not ask the dealership if they have something they can lend you. If you have a total loss and the vehicle is on HP then if recall correctly the insurancers pay teh finance house directly , this is because they are the legal owners . If you took a personal loan then the insurers would pay you out. The other problem is that you will recieve the value of the car not the omount of finance outstanding so i hope you ave GAP insurance. Check with your insurers . You are still liable to pay until the insurance company declare a total loss then they will sttle with thefinance company. Not paying will degrade you credit score. I missed payment may not be too bad but dont trigger a default .

[des8]

Re: Car is insurance write off what about the finance company?

You might like to look at the Consumer Rights Act 2015, sec 49; 50 & 54.
The damage was possibly caused by the trader (cars rarely "just catch fire")
They might try and tell you they are not responsible for any damage (see that sign there , mate!) but that could be considered an unfair term which means they might still be liable.

[Essexboys]

Re: Car is insurance write off what about the finance company?

Hi all thank you for your replys, my insurers do not cover me with a hire car, I don't think I have GAP insurance, my insurers do not know the car is on finance, they didn't ask me and I didn't tell them, I was hoping to miss this months payment of £341 as this would go towards a cheap car to get me to work. By the time the next payment is due ( 18th September ) I would hopefully have been paid out and would settle the finance in full. The car is insured for £9,000 pound and there is £4,000 outstanding on the finance, I know they won't offer me the £9,000 if I got anywhere between £6,000 and £8,000 I would be happy.

[Essexboys]

Re: Car is insurance write off what about the finance company?

Hi des8, they didn't cause the fire, dropped the car off for it to be serviced, as it wasn't running right, it happened on their forecourt (Audi main dealership) after the fire was put out, the mechanic said it looked like the turbo had got hot and set fire to some padding near the fuel lines, but he is only guessing and said he wouldn't like to make a statement to that effect. The fire officer present said that in his report he would conclude the fire was caused by a mechanical fault.
many thanks
essexboys

[des8]

Re: Car is insurance write off what about the finance company?

Don't just think the vehicle is worth about £7000.
Search the adverts for a similar vehicle so you know in advance of the insurer's offer what the vehicle is worth.
Keep a copy of those adverts so you can argue from a position of strength.

You also need to get a settlement figure from the finance house.
Depending on who the insurers are, they might pay the finance company directly and will need the settlement figure.


Did the dealer say why the car caught fire? Have you seen the fire brigade's report?
You might be able to recover at least your uninsured losses from the dealer using your rights under CRA 2015, or at the minimum get a courtesy car from them until the matter has been settled.

[R0b]

Re: Car is insurance write off what about the finance company?

I know there have been suggestions by [MENTION=39710]des8[/MENTION] about services performed with reasonable skill and care but hae the garages insurers or the fire brigade come to a conclusion as to how the fire occurred? If it was something beyond their reasonable control then it is unlikely you can claim the services weren't performed with reasonable skill.

However, an easy way out of this is what is known as frustration. The meaning of frustration falls under a number of subheadings but essentially where the contract can no longer be performed i.e. it is impossible to perform and neither party was at fault, both parties are discharged from the obligations.

An old case of Tayler v Caldwell in 1863 will be of use to you. In that case, the Claimant organised a concerts at a music hall however the music hall was destroyed before the concerts took place. The Court held that the contract was frustrated as it was impossible to perform due to the fire.

My suggestion, write a complaint to the finance co. explain to them what has happened and therefore the contract is frustrated as they can no longer supply the car to you as a result of the fire. The contract has become impossible to perform and both parties are now discharged. You can refer to the case above if need be.

- - - Updated - - -

I know there have been suggestions by [MENTION=39710]des8[/MENTION] about services performed with reasonable skill and care but hae the garages insurers or the fire brigade come to a conclusion as to how the fire occurred? If it was something beyond their reasonable control then it is unlikely you can claim the services weren't performed with reasonable skill.

However, an easy way out of this is what is known as frustration. The meaning of frustration falls under a number of subheadings but essentially where the contract can no longer be performed i.e. it is impossible to perform and neither party was at fault, both parties are discharged from the obligations.

An old case of Tayler v Caldwell in 1863 will be of use to you. In that case, the Claimant organised a concerts at a music hall however the music hall was destroyed before the concerts took place. The Court held that the contract was frustrated as it was impossible to perform due to the fire.

My suggestion, write a complaint to the finance co. explain to them what has happened and therefore the contract is frustrated as they can no longer supply the car to you as a result of the fire. The contract has become impossible to perform and both parties are now discharged. You can refer to the case above if need be.

[des8]

Re: Car is insurance write off what about the finance company?

thanks just seen your post 6 which answered my post 7 in advance!