Finance Q&A - Personal Circumstances

What happens if my car is written off and it’s on finance?

I'm just wondering what happens in this scenario and whether I'd still need to pay for car finance?

Erik Hardy

Answer from the Stoneacre finance team:

Hi Erik, thank you for the question.

The car is written off if it costs more than 60% of the car’s value to fix. You will then receive a settlement sum from your insurance company and can use it to pay off your car finance. However, in some circumstances, there is a gap between what insurer offers you and the amount you need to pay for the finance company. In this case, GAP insurance is invaluable as it covers the difference, so check if it is included in your finance agreement.

Additionally, you can challenge your insurer’s decision on whether the car needs to be written off, as well as a settlement sum if you think they’re being unfair. 

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