Hi everyone. I was involved in an accident and my vehicle was written off. The vehicle was financed and I still owe R400 000 on it. The insurance agreed to pay R360 000. They offered me a vehicle substitution deal so I wouldn't have to pay the R40 000 difference. Basically they buy me a car for cash for R360 000 and I carry on paying my installments with the bank as if I still had the old vehicle. Am I allowed to get a cheaper car, Eg a car for R300 000 and use the R60 000 extra as lump sum payment toward the car? Are there any terms and conditions to this deal? Thank you
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Vehicle substitution deal
- Thread starter Rachel91
- Start date
WAslayer
Honorary Master
I would imagine that all the terms and conditions are in the deal that they gave you.. They should have provided you with an offer letter of some sorts that should pertain all the details..
Else, ask them.. they are the only ones who know for sure what the specific terms and conditions are..
dunkyd
Executive Member
Ask them ?
TheChamp
Honorary Master
First time I hear of such an arrangement, sorry for my questions on top of yours but how exactly do they buy you a car? Do you have any say in this or they just come and present you with the one they decided on themselves? I am just worried that they might be kicking down some business to their friends and you might end up suffering with a car that does not meet your expectations.
WAslayer
Honorary Master
The catch, if any, will be set out in the offer they provide you.. They must have provided you, or once you ask them for it, a letter with all terms and conditions.. Read through this and determine if there is a catch or not..
Hi, thanks for your help. They buy the exact same car that you had with the cash payout from the insurance. You then pay the bank back with your usual installments and the old vehicle will just be substituted with the exact same new vehicle. I do get a say in that it's the exact model that was written off. If they can't find the exact model and features, they get you one that is lost similar. I just wanted to find out if there will be an issue with trading the vehicle in later, etc
Most not lost lol..
TheChamp
Honorary Master
There should be no issues in theory, ideal situation, there are no hidden issues with the car and come trade in time, everything goes in the usual trade in fashion.
But what if for some reason they buy you a lemon? You are still liable for the bank payments on your own, what risk are they taking in this whole process? At face value the deal looks good for your side but what is in it for them? What benefit do they get in sourcing the car for you? Would they perhaps negotiate a deal lower than the R360k and keep the balance? Looking at this it looks like an insurer going out of their way to help a client but I just can't help being a little sceptical.
Same here. I also thought it may be too good to be true and I just couldn't see the catch. But thank you for all your help
What car & model is it?
Did you check for substitutions yourself of what's available in the market?
It could be a win/win for the insurer, as some models depreciate so quickly in the first 2 to 3 years. For example if its a Volvo V40 I can understand, but a Golf GTI I would think twice.
Hopefully lesson is learned now, insurers do offer a shortfall cover additional to the retail insured value.
Did you check for substitutions yourself of what's available in the market?
It could be a win/win for the insurer, as some models depreciate so quickly in the first 2 to 3 years. For example if its a Volvo V40 I can understand, but a Golf GTI I would think twice.
Hopefully lesson is learned now, insurers do offer a shortfall cover additional to the retail insured value.