Beware - The Perils of leasing - oldroverboy.

A friend leased a Jaguar xf and 1 year in has had an accident where the car is a write off. As he does not want another jag he has been left with a huge shortfall between what the insurance company are paying and the "penalty" for early termination and the balloon payment.

Not a happy bunny!

I don't know the full details but have suggested he puts his pride in his pocket and gets another XF

Beware - The Perils of leasing - RT

Gap insurance is meant for just that occurence - some, but not all, insurance policies will cover "new-for-old" during the first 12 months which means the start of gap insurance can be delayed.

Beware - The Perils of leasing - gordonbennet

Are you saying they're allowing the GAP difference to be ignored so long as he gets another Jaguar, alarm bells are going off in my head, somewhere in the small print that difference in values is still coming back to him i'd wager.

I wonder if GAP insurance can be bought for lease car values?, if he'd bought the thing his insurance would have provided a new car for 12 months, some companies (NFU for example) thats 2 years, i don't know how it works with lease cars.

Beware - The Perils of leasing - daveyjp
Looks more like a PCP than a lease.

It also looks like a case of champagne taste and lemonade pockets.

Beware - The Perils of leasing - oldroverboy.
Looks more like a PCP than a lease.

Apologies you are correct!

Beware - The Perils of leasing - SLO76
That is the risk you take if you have a small deposit and no GAP insurance on any finance deal.

Edited by SLO76 on 06/02/2017 at 20:36

Beware - The Perils of leasing - leaseman

Although now operating as a Contract Hire Broker, I ran Contract Hire (Operating Lease) companies for a total of 11 years and can state that I never once had to charge a client any excess charges if they had written off their car. ORB please note!

I would take over the negotiation of the pay-out from the Insurance Company, with the client being informed of progress, and never once failed to obtain sufficient settlement to settle the outstanding value of the car to us. Customer retention guaranteed!

This was mainly due to the fact that we had reclaimed the VAT on the purchase price of the car and Insurance proceeeds are deemed to be "Compensation" and thus not attracting a VAT deduction from the net cash received. We invoiced the sale of the scrap at nominal true scrap value incurring little input VAT.

All Contract Hire companies utilise this method and are, therefore, in a much better position than PCP or HP lenders who do noy have this advantage in the event of a total loss. Perhaps the title of ORB's original post should be changed!

Of course some Contract Hire companies adopt utterly draconian Early Termination charges and may still look to capitalise on the client's misfortune and turn it into a windfall profit, but it is, as always, a case of Caveat Emptor. Read the Contract before you sign it. If you find such unfair terms, then GAP cover can be purchased for Contract Hire, but we advise clients to buy on-line where much better value can be obtained. Client satisfaction is worth much more to us than making a quick buck on overpriced insurance products.

Edited by leaseman on 07/02/2017 at 09:27

Beware - The Perils of leasing - concrete

Some very good advice here chaps. I was thinking it was a PCP not a leasing agreement. I am leasing and I will arrange gap insurance. The insurance company offer a different policy for HP/Cash purchase, Contract Hire, PCP and Leasing. Either way they offer a good level of cover in the event of an unfortunate incident such as this one. ORB, it might be time for your friend to really examine the fine detail of his agreement and see if he has any room to manouvre. As I understand it PCP means he owns the car and pays an agreed contract sum monthly with the GMFV being the balloon payment and keeping the monthly payment low. If he owns the car then he is responsible for it, the finance company are only interested in getting their money back. It sounds like the Jaguar dealer has seen an opportunity to sell another Jag in return for making life easy for your friend. He has few options, but whatever he does he had better get reading his agreement. Best of luck to him and let us know the outcome.

Cheers Concrete

Beware - The Perils of leasing - davecooper

Presumably the friend was happy with the Jag when he took out the lease and was prepared to live with it for 2 or 3 years. Thus sticking with Jaguar for the time being would not seem like a problem, especially if this is going to be the least financially damaging.

If buying on a PCP, jumping between manufacturers can cost you more than sticking with one make. I am always way over mileage and in the case of my last car, had been keyed down to the metal the full length of one side. Both these issues were written off and I got above the GFV against another car from the same maker. Basically, they want to keep you.

Beware - The Perils of leasing - TheBroker
Not much to add other than to reiterate GAP insurance can be handy and not cost too much. Don't get from dealer or broker as they will put a premium on it. Just shop online. Should be around £200 or less. LandRover try to charge £1100 ??
Beware - The Perils of leasing - RobJP
Not much to add other than to reiterate GAP insurance can be handy and not cost too much. Don't get from dealer or broker as they will put a premium on it. Just shop online. Should be around £200 or less. LandRover try to charge £1100 ??

That's insane.

When we bought the Z4 we took out a 4 year GAP policy on it for RTI, cost £212 through Frank Pickles.

Beware - The Perils of leasing - SteveLee

Call me Mr Heartless, but anyone stupid enough to spend hard earned funding someone else's depreciation just to be seen in a car they can't afford deserves all they get.

Beware - The Perils of leasing - oldroverboy.

Steve..Dave.. where did you get the idea that he wanted to be seen in a car he could not afford?

He earns a lot more than most people on this forum.

The car is funded by the mileage payments on company business and he has 2 other luxury cars.

For the Jaguar the situation has been resolved as his insurance has now fully re-imbursed the cost, and he has a new jag appearing very shortly. There was some misunderstanding over liability, but dashcam footage has helped plus a solicitor and the threat of action, with the implication that he had the means to go down the legal route.

Just glad i'm not guilty m'lord!

Beware - The Perils of leasing - davecooper


Wasn't me who said he couldn't afford it, I was just asking why he didn't want to stick with Jaguar.

I know some people do not understand why people buy new and then take the hit on depreciation. All I can say is, you buy new in the full knowledge that this will happen and if no one bought new, there would be no used car market.

Beware - The Perils of leasing - Stumblebum

My brother in law had a job which stipulated that he had a car which was less than three years old. I think he took a mileage allowance rather than a company car. He was in a senior client facing role, and his employer wanted to create the right impression.


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