Insurance write-off loan question

stuartadair · Crazy Courier Joined: 15 Oct 2009 Karma :

This is actually about a car but I'm sure its just as relevent for bikes.

Car is currently being assessed after an accident and is likely to be writeoff. Car value £3500. Outstanding loan £2500

Will the insurance just send me a cheque for the value and I'll keep paying my normal payments or will then insist on paying the loan off ?

Stu

P. · Red Rocket Joined: 14 Feb 2008 Karma :

Is it a personal loan which you bought the car with, or did you finance the car.

If its a personal loan, the money is yours and you can do what you wish. Logic says you pay off the car you no longer own and buy something to get around with.

t121anf · World Chat Champion Joined: 23 Feb 2007 Karma :

loan or finance?

loan, you get the money what you do is up to you, you still have your loan to pay.

finance, probably best to just pay it with the cheque, they may or may not just make the cheque out for you, you might have a balance left to pay unless you have gap insurance

]something like this

stuartadair · Crazy Courier Joined: 15 Oct 2009 Karma :

Thanks for replies. It was arranged through Citroen Finance when the car was new

P. · Red Rocket Joined: 14 Feb 2008 Karma :

JackieV · L Plate Warrior Joined: 05 Oct 2011 Karma :

Hi I work for an insurance broker and in another life I used to be a general manager of a car dealership. I would check the paperwork of your loan. If it has been done by Citroen Finance it will be hire purchase or an auto loan. In other words it will be tied to the car.

In 99.9 % of cases they will want you to pay the balance in full.

So double check with your finance company themselves before you do anything.
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Pete. · Super Spammer Joined: 22 Aug 2006 Karma :

THey normally ask you if there is any hire purchase on the car and if there is they will usually pay off the loan and send you any balance. If the payout doesn't cover the loan value you are liable for the difference.

Most hire purchase agreements stipulate that you must be fully comp and that you can't dispose of the car without paying off the outstanding, this includes total loss since the car then becomes the property of the insurer.
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