Advice regarding purchase of GAP insurance/PPI - reclaim?

[FlySi]

Hope somebody can offer some guidance on this.

 

I bought car from Motorpoint in 2007 for £9499.

By the time the extras were added in (getting the car to Glasgow, plates, registration, etc.) the final amount payable was £10648.12

 

This figure included:

 

Retail Price Protection/GAP for 3 yrs @ £299 and;

Extended Guarantee for 2 yrs @ £499

 

My existing car was to be traded in and I was offered £1800 as a part-exchange value.

I also put down a deposit of £100.

These were redeemed against the total cost of the new car and the balance remaining was £8748.12

 

I was under the impression that the £1900 (the part-exchange value and the deposit) had paid for

a) the extra costs of the car (registration, the GAP insurance, the guarantee, etc.); and

b) had paid £750.88 off the cost of the vehicle.

 

The balance would be paid for through finance with Black Horse.

I assumed that the finance would be for £8748.12 (excluding interest, etc.)

 

Recently, however, I looked at the finance agreement from Black Horse to see if there was any PPI included in the cost.

Whilst there was no PPI included there was a charge of £798.99 for insurance.

This insurance was over 48 months and the total charge for the insurance was £250.77 (£1049.76 gross).

 

For the car itself, the amount to be financed was lowered from £8748.12 (excluding interest, etc.) to £7949.13

Obviously the difference between these two figures is £798.99,

which also happens to be the combined cost of the GAP insurance and the extended warranty.

 

I was under the impression that the amount to be financed was £8.7k on the car.

The GAP insurance and the guarantee - to my mind at least - had been paid for with my deposit and the exchange value of my existing car.

 

Could anybody offer some clarity on this issue?

 

Under the heading Other Financial Information on the agreement it states that the total cash price for the car was £9849.13 and this included the registration etc.

The deposit and exchange value were redeemed against this but did not include the GAP insurance and the warranty - these were left out and charged separately.

 

Where does this leave me with regard to reclaiming costs?

I was not aware at any time that the GAP insurance and warranty would be paid for separate to the finance for the car proper.

 

What irks me more is that the GAP insurance was for 3 years and the extended guarantee for 2 years but I was paying out for 4 years. Surely this is wrong...?

 

I always thought that the term of payment had to correspond to the term of the policy.

If there is a case here for misselling (I suppose) then who is liable

- Black Horse (as the provider of the finance) or

Motorpoint (whose documents make no mention of paying for the GAP /guarantee separately)?

 

If it would help, I can scan the documents and upload them for anybody's reference.

Thanks is advance.

[dx100uk]

i've moved this to the PPI forum

 

i'd get reclaiming

 

treat it as PPI.

 

welcome finance or the FSCS amongst others are allowing GAP reclaiming.

 

you were duped - end of!

 

dx

[BigBen70]

Sorry I don't think that it is as cut and dry as that.

 

The claims process is there to protect people who where miss sold products.

 

 

As I understand it when you buy gap insurance on a Black horse document you are asked to sign again to say that you understand the policy and pricing?

 

 

This second signature is in addition to the main loan signature.

 

 

Even if you buy the policy and sign electronically via their internet systems you are asked to sign again independent of the loan.

 

I am not a claims expert but I would have thought that two separate signatures saying that you understand the policies and benefits would be difficult to dispute.

Edited February 15, 2012 by BigBen70

[dx100uk]

nope GAP is just another rip off

 

as the FSCS have agreed recently.

 

looks like that industry is going to get hit next

 

and NOT before time

 

as for the additional warranty payments

 

those are totally unneccessary as well.

 

dx

[FlySi]

@BigBen70 - I've had a look at the documents.

 

 

I signed the Demands and Needs statement and I signed a form which stated that I wished to buy the Extended Warranty and the GAP Insurance.

 

 

However, these documents do not include

a) any prices and

b) any mention of the warranty/insurance being paid by finance agreement over 48 months.

 

I also have the 'in-house' document from Motorpoint that outlines what each product costs

but this does not mention any finance agreement for the warranty/insurance.

The only reference to finance for the warranty/insurance is on the actual agreement itself.

 

@dx100uk - Thanks for moving the thread. I wasn't entirely certain if it would fall under the umbrella of PPI

Edited February 14, 2012 by FlySi

[dx100uk]

exactly rip off!!

 

get reclaiming.

 

 

dx

[FlySi]

Who should I complain to/submit the reclaim to? On the face of it I think Black Horse, but I also think Motorpoint has a case to answer.

[dx100uk]

BH

 

dx

[FlySi]

Out of interest, does anybody know of any sources of information on GAP insurance, etc. and any attempts made to reclaim it? I can't find anything on the FOS site about it.

[dx100uk]

http://www.consumeractiongroup.co.uk/forum/showthread.php?332548-welcome-charges-reclaim-help-please&p=3707454&highlight=fscs+gap#post3707454

 

There are 3 types basically-

 

Finance gap - pays the finance shortfall between any outstanding loan and the insurance settlement

 

Return to invoice - pays the difference between the invoice price you paid and the insurance settlement

 

Vehicle replacement insurance - pays the difference between the cost of replacing the car with a new car of the same specification and the insurance settlement.

 

Prices for Gap are really keen on the internet, I have found 3 year RTI for £81 and 3 year VRI for £99. Much, much cheaper than dealers.

 

Just one word of warning, all gap policies have a claim limit, and even if your policy is a 'return to invoice', you will only get a figure up to the claim limit you opt for

 

eg

 

car is £12,000 and written off at £6,000. If you have opted for a £5,000 claim limit then you will still be £1,000 short.

 

and of-course te salesman got commission too.

 

dx

[dx100uk]

as this is a car sales site

not one touting for reclaiming fees

 

this is worth a read.

 

http://www.parkers.co.uk/cars/advice/news/Archive/GAP-insurance---have-you-been-conned-into-it/

 

dx

[BigBen70]

Hi its normal for the needs and demands not to have prices on them they are simply saying that you could benefit from the products and wanted to talk about them.

 

The prices should have been split out on your order form as insurance is not a subject to vat. I would talk to black horse if you feel you have been miss sold. After all no-one but you really knows that.

[FlySi]

UPDATE 22/02/12

 

Spoke to Black Horse today regarding a number of matters and this issue came up.

 

 

The individual I spoke to was extremely helpful and understood my position,

ie., having put down a deposit of £1900 it was reasonable to assume that this had paid for all of the extras (including the insurance) and paid for some of the car.

 

 

However, he stated that it was 'standard practice' to structure the payment in this way.

When asked if I would like to escalate it, I said yes and was told to expect a response within 48 hours.

 

No more than 2 hours later I received a call from the complaints department at Black Horse.

They made their position quite clear that the agreement was structured properly.

 

 

When I mentioned that PPI claims were being settled on the basis that the duration of payments must equal the coverage of the insurance policy (i.e.. 24 months of payments for 24 months of coverage) I was greeted with silence.

 

 

I point out that the GAP policy was for 3 years,

the warranty for 2 years but I was paying out over 4 years.

 

 

I was told that I was paying out over the lifetime of the car finance agreement so it was acceptable.

By that standard, if I had the same warranty and GAP policy on a 10 year finance agreement I would pay nearly £1000 in interest!!!!

 

I was told that I would receive a response in writing from them in the next few days and that I could contact the FOS if I wished.

As it had taken less than 2 hours to decide on this I thought I'd take less than 30 seconds to contact the FOS.

I've now submitted a complaint via the FOS: Black Horse has 8 weeks to investigate.

 

I'll let you know how what happens.

[dx100uk]

well done

 

go get 'em

 

dx

[FlySi]

I'll have an update on this in the next week or two (it got rejected by Black Horse initially because the Ombudsman's information wasn't clearly explained).

 

In the meantime... two questions for you:

 

1) Seems daft to ask, but on a car finance agreement do you have a cooling off period in which to reconsider and cancel?

 

2) Does the customer copy of the finance agreement have to be identical to the finance company's copy? For example, if there is a declaration/statement and a set of options that must be ticked on the finance company's copy, does this also have to be included on the customer's copy? If there's a legal requirement I'd be grateful if somebody could point me in the right direction.

[dx100uk]

1. not if signed in the showroom

 

2. unsure but i would think if you signed it, they must be the same?

 

dx