Car Finance and write off issue

[Samcyberfairy]

Hi
I had an accident that effectively wrote my car off. The accident was the other party's fault, and they admitted it.
It was taken care of by a claims company rather than my insurance company ( as a. I was only third party on my car and b. my friend is a manager for the claims company and I got excellent service).
Anyway, I got a payout of £2000 on my car. The personal injury thing is on going but I am not dead so I don't expect much. However, my car was on finance (Black Horse) and I was only two years 9 months into the credit agreement of 5 years with them. I have never missed a payment or had a fall out with them. However, I now have to tell them my car is a write off. The other party's insurance company wrote my car off but said it would remain my property as they didn't want to be bothered with it. So I have sold it for scrap.
My finance agreement says that if I want to pay it all off in one go I can do. Am I correct in assuming I can get them to write off any interest for the last 2 and a bit years , OR will I have to pay them exactly what I would owe if I paid monthly for the next 2 and a bit years if the car had not been written off? They are being very cagey about giving me any details and I can't afford a whopping great bill- if I could I wouldnt have bought a car on finance in the first place, which in retrospect was a stupid thing to do.
Any advice very gratefully recieved.
Thanks
Sam

[JOSH_IOU]

Sam its not stupid if thats the only way you can afford a car.

Some people with family's depend on a car for there weekly shopping etc..

Is the interest on the original finance agreement? are they charging a penalty for the agreement now you don't have a car?

[Samcyberfairy]

Thanks James. I havent actually told them anything much at the moment - just what should I do if I want to pay it off for any reason. I cant find anything in the paperwork except a rather ambiguous "payment of the balance is required within 7 days less any discount deemed applicable", which is not very revealing.
They think I still have the car and its drivable (it only happend a few weeks ago) and I am still paying them but obviously I would prefer to get it out of the way.
The interest is on the original agreement, yes, and doesnt mention penalties anywhere that I can see - just a rather stern "pay up within 7 days" kind of thing.

[jampot]

Ask them for a settlement figure - but the thing is, if the loan is secured on the car, and the car no longer exists, I would expect them to come looking for their money. Of course they may agree to continue to allow to pay in installments, but its probably worth putting the £2000 you received against the finance and hope it covers what was outstanding.

I hope you haggled the £2000 payout to get the best possible deal! Insurers are notorious for providing low payouts to minimise their own losses.

[Samcyberfairy]

I expect to have to pay them the value of the car that remains but I was hoping that they would not charge me the interest that I would have paid over the next 2 and a bit years as I am paying the full amount remaining now rather than spread out.
I had to use the £2k to buy another car to keep me on the road, but as the book price of my trashed car was only £1200 I didnt do to bad with my haggling
Hopefully once the personal injury thing is sorted I will have a bit more towards the fnance. Would it be worth waiting till I get this and continue to pay my car finance and THEN ask them for a settlement? That way, at least I will have a bit to pay them with.
I am afraid I got terribly ripped off with car finance and I have an awful feeling that its going to run into a lot of money to settle.

[jampot]

As I understand it, a settlement figure SHOULD be the balance outstanding now, less any "penalty" (!) interest which they are obliged to add-on in the event that the loan is terminated early. So in theory, if you pay off in a lump sum now, you won't pay as much as X lots of £Y (where X is the number of installments remaining and £Y is the installment amount). You may end up paying the current outstanding (pro rata) balance, plus 6 month's interest, although whether this is a fair early repayment charge is probably open to debate...

I guess there's no harm in asking for a settlement figure now (you might be surprised) as all they will do is give you a figure which will be valid for a certain amount of time, and as far as I know, won't trigger them into wondering whether or not the car still exists...

[Samcyberfairy]

Many thanks Jampot - I will give them a call.

[Gallen]

I hope you haggled the £2000 payout to get the best possible deal! Insurers are notorious for providing low payouts to minimise their own losses.

On a tangent here, if the car is on finance, and the insurance company have effectively "bought" the car from Sam, isn't the insurance company liable for any further payments - as would be any private buyer who purchases a car with outstanding finance? - or risk having the car snatched back, as it wasn't legally Sam's to sell??? .....Mmm ....there's a thought!