You don't need to be an 'investor' to invest in Singletrack: 6 days left: 95% of target - Find out more
I’ve never had a vehicle on finance so don’t really know what the T&Cs are like, and am trying to answer a query for an acquaintance.
If you bought a second hand vehicle on finance, wrote it off in the first week, and got pretty much the full value from your insurers, I would have thought you were required to repay the finance and then start again from scratch.
I would also have thought that you cannot simply keep paying the finance and not tell them anything, then use the insurance money to pay cash for a replacement. I assume the finance is secured against the specific vehicle - which finance companies can seize for non-payment (when they still exist) - and this could also cause HPI issues if someone else bought the written off bike and repaired it. Also, I don’t know if it’s an HP type arrangement, or a balloon payment/give it back choice at the end - if the latter then you’d be giving a different bike back!
But as I say, I’ve never had a vehicle on finance so have no knowledge of what the ‘rules’ are likely to be.
I cannot think of any asset linked finance agreement I've ever seen that wouldn't require the loss of the asset to be disclosed and the finance settled.
The legality of many such arrangements is that you are not the legal owner of the vehicle. In the others the asset is security. Either way no normal finance agreement would allow what is being suggested.
Serious risk of breaching arrangements and ending up with something nasty on credit history I'd suggest possibly even a fraud charge.
It's quite possible that the insurers would HPI check before paying out.
Depends what type of finance it is. If its just an unsecured bank loan or credit card then I'm sure they don't give a toss what you actually spend the borrowed money on. But if it's HP or something similar then I'm sure they'd need to know and the money would transfer direct from the insurance company to the finance company to clear the finance.
Depends what type of finance it is. If its just an unsecured bank loan or credit card then I’m sure they don’t give a toss
Good point - my earlier reply does assume it is a car finance product (PCP, PCH, HP etc) from the dealer or third party and linked to the car.
The finance company has additional legal obligations to the consumer in those circumstances and therefore also sets the agreement up with more protections than a loan or credit card.
My understanding would be that if the finance was against the vehicle then it would be expected to pay off finance as car will be sold on as salvage (but with finance owing) the finance company owns the car not the guy that wrote it off.
does assume it is a car finance product (PCP, PCH, HP etc) from the dealer or third party and linked to the car.
It is, in one shape or form. Apart from the car bit - the idiot bought a Fireblade less than 12 months after getting his bike licence, and high sided on a roundabout on his first shot of it. So he’s buying another one exactly the same.
The finance docs will reference an engine/ serial number as well as the licence plate won’t they? So he can’t just swap like for like.
If its HP or similar, it used to be that you don't own the vehicle till its paid off, so the HP company get their money and then you get any leftovers. Different for a loan.
We used to check through HPI before making an offer (back in the day when it was a paper form you sent off!)
After a bit more thought on this would the insurance co not ask/check to see if finance is outstanding as they would pay that first before your mate gets whatever is left/shortfall to pay on balance of finance.
You’d have thought so, but I really don’t know. I wouldn’t call him a mate either, he’s a knob.
It's a secured loan. The finance company own the wreckage.
He's then bound by their terms. Hes agreement will have a clause in to cover this.
He maybe able to port the finance onto the new bike.
I bought a car on finance in 2017 and wrote it off after 5 days.
The insurance pick up that it is financed and basically when you agree the payout they sort it with finance company after you ring to get a settlement figure and give permission for insurance to deal with them.
You get the difference back, or pay the difference to the finance company.
My advice: don’t write off a car after 5 days.