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What happens if a car is written off under finance?

What is a write off?

A write off is when a car is either unsafe to drive following an accident, or isn’t economically worthwhile to repair. If a car is deemed unsafe, the owner is paid out for the loss. However, it get’s more complicated when calculating whether its economically worthwhile to reapair the vehicle. This is calculated through a repair-to-value ratio (typically 60%) So, if your car is worth £7000 at a repair-to-value of 60%, the vehicle will be written off if the repairs exceed £4000.

Dispute the write off

You’re entitled to dispute the vakue of a write off, or convince an insurer that the value of the car is worth repairing. If sucessful, this can mean paying finance back or having the vehicle fully repaired. You need to be prepared to negotitiate, insurers will need to be convinced with evidence to change the value of the write off. You’ll need to research and show the following:

-the condition and mileage of the vehicle

-evidence for the value of the vehicle

-the cars service history

-written testimonies from dealers as to the cars true value

-an independant valuation report.

Contact the financial ombudsman

If the insurer disagrees, but you believe that you have a strong case, take it to the financial ombudsman and they will settle the dispute.

GAP Insurance

Take a good look at the terms of your finance agreement, you need to see if you have GAP insurance. The insurance pays the debt owed to he finance company directly. If there’s anything left over it goes to you, bit if there’s a shortage, it’s your responsibility to cover it.

Talk things through with your financer.

Your financer will want to help you and keep the deal they have with you. The worst thing you could possibly do would be to cancel your monthly payments and hide away. They can get you in a new car in no time, and it all be sorted.

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