Cancelled GAP Insurance

[upnorthal]

Hi

 

I'm hoping this will be a simple query.

 

Five weeks ago I purchased a new Fiat Bravo for £12,000. At the dealership I signed up for GAP insurance. The GAP insurance cot £499.

 

The car and GAP insurance was financed by HP agreement with FIAT Finance.

 

Car Cost £12,000 + £4000 interest over the term of five years

GAP Cost £499 + £279 interest over the term of five years.

 

The GAP insurance policy was with a company seperate to FIAT finance; it was just paid for with the HP agreement.

 

Now, the GAP policy contained a 14 day cooling off period in which I could cancel. Looking on the Internet I sound discovered I had been ripped off for GAP insurance. I can get the same level cover and a more comprehensive policy for £114.

 

So, I wrote recorded delivery to the GAP insurance and cancelled the policy (within the 14 days). I clearly stated I wanted them to advise the HP company that paid them. The GAP insurance company wrote back stating they had cancelled the policy and I was due a refund.

 

I have just received a cheque for £499 from my local Fiat dealer as way of refund for the GAP insurance. This is not good. The HP finance agreement will still charge me £279 interest for the GAP insurance I have just been refunded on.

 

Can they get away with this? Effectively, I'm being charged credit on a GAP policy I don't have. I don't understand why the dealer sent me just £499. My contract was not with them surely. They just acted as agents for the finance company and the GAP insurance policy.

 

Cheers Al

Edited December 19, 2009 by upnorthal

[Mossycat]

Yes, they can get away with it if you let them.

 

They have taken the easy way out, what you should do is go back to the garage and arrange a new finance agreement WITHOUT the GAP.

 

It's more hassle for them, new docs required so they will tell you otherwise, and may suggest that you bank the £499 and let the interest you arn on it offset the interest you get charged (yes I know it won't but they will hope you don't spot that).

 

You will need to be firm and tell them that you are demanding a new agreement because the insurance is now declined, and you wil need to send that cheque (or the money) back to whoever sent you it.

 

Mossy

[upnorthal]

Thanks.

 

I bet the garage get apaid a decent chunk of that interest up front from the finance company, hence their cheque for the net value , excluding interest.

 

I'm going to write to the finance company and put them on notice that the insurance is cancelled and that I want confirmation they are ammending the agreement.

 

I don't see what the garage has to do with the finance company. The contract names me and FIAT Fianance, not the dealership.

 

I thought the spirit of Section 75 protection was that you don't end up paying for something on credit that you don't have / or goods that are faulty etc.

[Mossycat]

I don't see what the garage has to do with the finance company. The contract names me and FIAT Fianance, not the dealership.

 

 

The garage is the agent for the finance company. You didn't deal direct with them, and also a new proposal now needs to be submitted because the amount has been changed, this also needs doing via the garage.

 

And finally, the credit agreement must be signed on trade premises.

 

Mossy

[upnorthal]

The garage is the agent for the finance company. You didn't deal direct with them, and also a new proposal now needs to be submitted because the amount has been changed, this also needs doing via the garage.

 

And finally, the credit agreement must be signed on trade premises.

 

Mossy

 

The garage is not named in the HPA contract. Agent they may be, but not according to the agreement - therefore I don't recognise them as party to the contract.

 

I've written to the HPA company advising them they are joinly liable as per s75 Consumer Credit Act. I've enclosed a copy of the confirmation of cancellation for GAP insurance (for which they are joinly liable as the HPA finances this).

 

If they want me to deal with the garage as their authorised agents, then they can put it in writing to me.

 

As it stands, I'm paying interest on a service I don't have. It is my understanding that a basic, fundamental tenant of s75 Consumer Credit Act is that no consumer should be in the position of paying for goods or services they have not received / or are not of satisfactory quality.

 

I will see what they come back with.

[honeybee13]

Hello Upnorthal.

 

I can see what Mossycat means about the garage being an agent. This isn't quite my field, although insurance and assurance were. If I sold you a policy with Aviva, say, I don't think I would appear on the policy, but I would have been the agent and claimed the commission on the sale.

[dw190]

Surely the agreement comes under the debtor/creditor/supplier agreement part of the CCA. The motor trader/broker being the supplier of the goods. In this case the goods supplied are now different to those stated in the agreement so the agreement should be null and void and a new agreement made.

[Mossycat]

Surely the agreement comes under the debtor/creditor/supplier agreement part of the CCA. The motor trader/broker being the supplier of the goods. In this case the goods supplied are now different to those stated in the agreement so the agreement should be null and void and a new agreement made.

 

Exactly!

 

And the place to do that is the garage

 

Mossy

[upnorthal]

thanks guys. Lets see what they come back with.

 

I can't believe I was so stupid to agree to a £400 Gap policy at the showroom. I've found one online with higher cover levels for £140.

 

 

Cheers

 

Al

[Surfer01]

We got caught the same way except that we were told it was free. What they did was to disguise the cost in the price of the car.

[honeybee13]

Hi upnorthal. I really wouldn't beat yourself up too much over this. I suspect you might have been swept along by the euphoria of buying a new car [hope I got that right] and the salesperson made the most of it to persuade you their GAP insurance would be a good idea. I guess they weren't obliged to tell you if the policy was competitive or not.

 

I've done it myself in the past over extended guarantees, for instance and now leave them alone. I don't mean to hijack your thread here.

 

You might have been able to cancel the GAP insurance within the 'cooling off' period, but I'm out of touch with all this, so don't take my word for it.

 

You have learned a valuable lesson though, and hopefully next time you will be a bit more wary.

[upnorthal]

You might have been able to cancel the GAP insurance within the 'cooling off' period, but I'm out of touch with all this, so don't take my word for it.

 

You have learned a valuable lesson though, and hopefully next time you will be a bit more wary.

 

No problem. I was kind of 'sucked in' when I was in the showroom getting my new car. I managed to cancel the policy in time and I have a written letter saying it is cancelled. The issue is the Policy was £499 (I don't have the letter in front of me) and interest another near £200.

 

They have sent me a cheque for £499, but the full amount including £200 interest is still on my finance policy.

 

I guess they thought I would just forget about the interest!