My car was written off but the settlement doesn't cover the finance settlement - what can I do?

I was hit by a drunk driver in the early hours of the morning. My car was parked outside my house and luckily nobody was in it. Also, luckily he is insured so I'm claiming from his insurance. My car is on finance, there is a little over £6k to pay. My finance has informed me I can settle the finance with 5500.

I'm concerned in case my car is a write-off and the insurance won't cover the finance settlement. I was informed I wouldn't get market value for the car, only physical value, which doesn't seem right to me. I'm having to go down the compensation route in case it's a write-off and the settlement doesn't cover what I owe, I don't find it very fair me having to pay for a car I will no longer be using and then paying for another car on top of that.

Do you have any advice about this?

Asked on 2 October 2019 by Leisha Owen

Answered by Tim Kelly
You are entitled to the "market value" of the vehicle at the point of loss. Your entitlement is covered here : www.honestjohn.co.uk/insurance/coles-v-hetherton-w.../ You are not however entitled to having the cost of finance that you owe covered. That is a contract you agreed to prior to the incident and you would have had to have bourne. You have to bear in mind that vehicles depreciate though it may seem unfair. It would be identical if you had got a private loan. The money you owe to the bank has no relationship to the market value of the car.

Do you have GAP insurance? if so, you need to use that. The primary purpose of GAP insurance is for this type of situation. I would never buy a car on finance without it. Any shortfall would be up to yourself to make up if you do not have GAP.
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