GAP Insurance and PCH

Lighters · 24 Nov 2016 at 14:08

Hi,

Can I get some advice on my first PCH purchase.
Seat Cupra 290 DSG Black Edition 2 years
£2400 upfront
23x£162 monthly payments
£180 admin fee.

My vehicle is due to be delivered tomorrow.

1. Do I need GAP insurance and what exactly will this cover under PCH?
reading the terms and conditions I'm a little confused.
2. In the event the car is written off do I need to worry about insurers not paying out full value for the vehicle or do I only need to worry about making the repayments on the vehicle for the remaining term as I dont own the vehicle? (Would these not also be reduced/wiped as I would be paying for a vehicle I cant use?) Ive also read that insurers must pay out full value within the 1st year.

I read a case on PCH where the driver had no GAP insurance but the insurers paid out the full value of the vehicle and remainder of the agreement. So all seemed fine, ofcourse he lost his first initial payments and any payments already paid towards the finance so in my case the £2400 upfront and any monthly payments. I assume the GAP insurance would cover me for this?

3. Do I need the value of my vehicle and specifically what insurance would I require if any to cover risks. (I havent been quoted a value figure from leaser)

See terms 5.3 and 8.2 & 9 for what im referring to.
https://postimg.org/gallery/1qohcahw8/

General leasing queries:
4. Should I expect so spend significant time inspecting the vehicle upon arrival as after this im liable for any damage should it not be noticed. (Ive read BVRLA fair wear and tear but how is it in practice)

5. Does the car need to be strictly services by the seat dealership as per their terms or can I use an "approved" or specialist garage and get it stamped? (Guessing no on this) I think seat said £416 over the 2 years but should I expect this to include labour or any other costs I havent thought of?

6. I receive SEAT recovery service as per their agreement but as the vehicle new would I be able to take the car directly to SEAT and have it repaired under warranty as its new or would I have to go through my leasing company? (Obv wear n tear wont be covered but you shouldnt expect anything to go wrong on a new 2 year old car)

7. Is there any other advice people would give me as its my first lease and dont want to be bent over.

Thanks for your help.

Skillmister · 24 Nov 2016 at 14:37

Good job you looked into all this before making a massive financial commitment.

Lighters · 24 Nov 2016 at 14:47

...I previously had but it was back in June when I first made the commitment and only received the paperwork last week.

Honestly some posts are so useless on this forum, why post at all? Its not like I have made a post with no effort.

I have the money to pay the full 2 years upfront but it makes financial sense to lease this type of vehicle due to the cost of buying new and the depreciating cost.

Im simply asking further clarification on GAP insurance as I have read conflicting/different advice and wanted some personal opinions or clearer examples with figures.

I also wanted further opinions from people who have experience with leasing, in terms of wear and tear and if theres anything I have missed or advice they would give?

As always its easier to learn from past mistakes and hindsight etc.

Jono · 24 Nov 2016 at 14:49

I'd buy gap insurance. Privately for about 1/4 what a dealer would charge you. Then you're covered.

matthab · 24 Nov 2016 at 14:58

Yes get gap insurance as your cars value will drop off a cliff when you drive it off the forecourt, its that "gap" you need protecting. it all comes down to managing risk/peace of mind, for me it was a no-brainer. Try these guys for GAP insurance: https://www.ala.co.uk/gap-insurance/contract-hire-gap-insurance

As for servicing etc many lease companies expect to see dealer servicing, Seat/VW/Skoda do its fixed so the price is the total you would have to pay.

tsinc80697 · 24 Nov 2016 at 15:00

If the car was written off or stolen, and you had GAP insurance, what happens to the large deposit you've paid? I'm assuming the GAP insurance covers the lease company but what about the few grand you've paid upfront.

Curious as I've been looking into leasing myself.

Lighters · 24 Nov 2016 at 15:00

ALA charge £160 for £30000 car cover over 2 year term and £15,000 cover with £3000 protection for my initial "deposit".

Im still unclear that in the event of a total loss, if I'm responsible for the shortfall in the payout from my insurer to the leaser? Or am I just responsible for the remaining payments on the finance agreement? If at all as the car would then be unuseable. (Surely this is what insurance covers)

As if it was written off within the 1st week would I only be due to pay £3726 or could there potentially be more due to not paying out the full amount of my car or is there no risk within the 1st year as they have to treat it like new and pay the full amount.

https://www.ala.co.uk/quote.php?action=goto&prod=GAP&group=cars&options=3&def=CHG&qual_gap=1

tsinc80697 - You lose it unless you have initial rental cover which is £23 for me to cover £2000 deposit.

I mean the definiton says "Contract Hire GAP Insurance will, in the event of a total loss claim (accident, theft, fire or flood damage), cover up to 100% of the outstanding rental payments for the vehicle and cover any shortfall in the market value settlement provided by the insurer. (This suggest to me without it I would be liable for shortfall and remainder of payments but I have seen previous forum posts where insurers paid out fully on both of these aspects without GAP insurance.)

For an additional premium you can now also protect the initial rental/deposit you paid at the start of your agreement – this is usually equivalent to 3, 6 or 9 of your subsequent monthly rental payments. This means that if your vehicle is declared a total loss, as well as clearing your outstanding payments with the finance company you receive an additional settlement for the upfront payment.

There are three levels of cover to choose from: £1,000, £2,000 or £3,000. The amount you select should be enough to cover the full amount you paid as an initial rental."

Im simply wanting to know if its even worth paying any extra due to the small risk.

matthab · 24 Nov 2016 at 15:02

Lighters said:
ALA charge £160 for £30000 car cover over 2 year term and £15,000 cover with £3000 protection for my initial "deposit".

Im still unclear that in the event of a total loss, if I'm responsible for the shortfall in the payout from my insurer to the leaser? Or am I just responsible for the remaining payments on the finance agreement? If at all as the car would then be unuseable. (Surely this is what insurance covers)

As if it was written off within the 1st week would I only be due to pay £3726 or could there potentially be more due to not paying out the full amount of my car or is there no risk within the 1st year as they have to treat it like new?

The link I have included above is just for PCH customers. They cover the deposit and the remaining payments.

For an additional premium you can now also protect the initial rental/deposit you paid at the start of your agreement – this is usually equivalent to 3, 6 or 9 of your subsequent monthly rental payments. This means that if your vehicle is declared a total loss, as well as clearing your outstanding payments with the finance company you receive an additional settlement for the upfront payment.

Because its a lease you would only be liable for the remaining payments + deposit, you never actually own the car.

Lighters · 24 Nov 2016 at 15:28

matthab said:
The link I have included above is just for PCH customers. They cover the deposit and the remaining payments.

Because its a lease you would only be liable for the remaining payments + deposit, you never actually own the car.

Thanks for the help!

So using ALA:
Cost £28000 - Need to get an exact figure from somewhere/what is reliable?
Term 2 years
Initial rental cover £3000 (Added extra)
Level of cover £5000 (Surely I dont need £15k as the remaining finance will be £3726 and my initial rental cover is covered for £3000)

This will cost £148 or £153 with £7500cover but this seems excessive if its just the repayments which doesnt seem too bad.

So in the event of an accident and I have insuarnce everything is settled but if I dont then Im responsible for 50-100% of the remainding £3726 payments over the 23 months. Have I missed anything?