Hannah's car was written off, but her GAP insurer wouldn't clear her finance. She got in touch with us to investigate.

What happened

When her car was written off, Hannah’s GAP insurer refused to clear her finance in full. Her GAP insurer told her the policy only covered finance on a purchase price in line with a trade guide valuation, and she paid too much for the car. Because of this Hannah thought the policy had been mis-sold.

The garage that sold the GAP policy told us that Hannah had signed for the policy documents, which included the key features about the claim limit.

What we said 

The garage that sold the GAP policy to Hannah told us that she had signed for the policy documents. These included the key features about the claim limit. 

When we checked the policy wording, we found that it did only cover finance on a purchase price equal to the trade guide value. 

We then checked the invoice for the car and found that Hannah had paid a lot more than the trade guide value. The car sale documents did include a signed statement to say that Hannah had received the GAP policy documentation. 

We explained to Hannah that the GAP insurer was entitled to put a limit on the amounts that could be claimed. 

But we told the garage these limits should have been clearly explained. Hannah needed to know that the amount she got from a claim would be affected by the fact that she was paying more for the car than the guides suggested. 

We felt Hannah would have checked and negotiated a lower price for the care, had she realised there was a term limiting any claim payment. 

We decided to uphold Hannah's complaint, and told the garage to pay Hannah compensation. This would be equal to the outstanding finance cost of the vehicle, over and above the trade guide retail value.