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Finance company closed down and sold my loan

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  • 02-01-2014 11:57am
    #1
    Gunner1886
    Registered Users Posts: 6 ✭


    I recieved a letter from Friends first today saying my loan has been sold to a new company due to them closing down, Ihad a car from them the car was a wrecked after some boy racer smashed me from behind, so I have been paying the short fall left over from the insurance and scrapage money I have already given them, so I am wondering do I have to deal with this new company or can I now stop paying?


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    #2
    smcgiff
    Closed Accounts Posts: 5,943 ✭✭✭smcgiff


    Gunner1886 wrote: »
    I recieved a letter from Friends first today saying my loan has been sold to a new company due to them closing down, Ihad a car from them the car was a wrecked after some boy racer smashed me from behind, so I have been paying the short fall left over from the insurance and scrapage money I have already given them, so I am wondering do I have to deal with this new company or can I now stop paying?

    Why do you think you can now stop paying? When you signed the loan agreement did it state that FF could not sell on your loan?

    How come the insurance didn't cover the cost of the loan?


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    #3
    Gunner1886
    Registered Users Posts: 6 ✭Gunner1886


    smcgiff wrote: »
    Why do you think you can now stop paying? When you signed the loan agreement did it state that FF could not sell on your loan?

    How come the insurance didn't cover the cost of the loan?

    The insurance company sent out an accessor, the car was two years old only covered a little over half the value. I was unsure if I did or didnt have to pay due to my contract being with friends first not with Embarton ltd.
    I am not good with this sort of stuff so I am seeking advice of the better informed.


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    #4
    chris85
    Registered Users Posts: 4,502 ✭✭✭chris85


    smcgiff wrote: »
    Why do you think you can now stop paying? When you signed the loan agreement did it state that FF could not sell on your loan?

    How come the insurance didn't cover the cost of the loan?

    If the loan is more than value of the car (which generally is) than this will more than often happen. The insurance covers value of car, not value of loan.


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    #5
    homer911
    Registered Users Posts: 5,119 ✭✭✭homer911


    Yes, you have to keep paying

    And for the sake of clarity, its Friends First Finance that is closing down - this was announced a long time ago, not Friends First itself, which is the parent company


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    #6
    smcgiff
    Closed Accounts Posts: 5,943 ✭✭✭smcgiff


    chris85 wrote: »
    If the loan is more than value of the car (which generally is) than this will more than often happen. The insurance covers value of car, not value of loan.

    Friends First were giving out car loans greater than the value of the car? Didn't think they did that.

    OP, the company that took over your loan no longer have an asset they can repossess. But you still owe them the money.

    Can you afford to pay it back?

    You can offer them a sum less than what is owed? They themselves will have bought your loan at a significant discount.

    If you don't pay it and don't come to an agreement you'll damage your credit rating. Will you be looking for credit in the next few years? Also the company could take you to court to seek a judgement and force you to pay.


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    #7
    chris85
    Registered Users Posts: 4,502 ✭✭✭chris85


    smcgiff wrote: »
    Friends First were giving out car loans greater than the value of the car? Didn't think they did that.

    OP, the company that took over your loan no longer have an asset they can repossess. But you still owe them the money.

    Can you afford to pay it back?

    You can offer them a sum less than what is owed? They themselves will have bought your loan at a significant discount.

    If you don't pay it and don't come to an agreement you'll damage your credit rating. Will you be looking for credit in the next few years? Also the company could take you to court to seek a judgement and force you to pay.

    Loan will always be worth more at the start especially. For instance you buy a car for €10000, the finance agreement would have all interest for the period of the loan loaded at the start so you may immediately owe say €12000 and the car would instantly drop in value due to another owner of the car on logbook.


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    #8
    smcgiff
    Closed Accounts Posts: 5,943 ✭✭✭smcgiff


    chris85 wrote: »
    Loan will always be worth more at the start especially. For instance you buy a car for €10000, the finance agreement would have all interest for the period of the loan loaded at the start so you may immediately owe say €12000 and the car would instantly drop in value due to another owner of the car on logbook.

    Even when it's a fixed rate loan and you clear off the loan you only get penalised for approx six month's interest. Not the full amount includuling all the interest.

    Then you have regular monthly payments to reduce the balance. I find it odd that there would be a significant amount owing on the loan after an insurance pay out. Now, the OP did mention he has the scrap value of the car. If they left the car with the OP the insurance company will have placed a value on that, which the OP may not now be able to realise.

    In general I would expect person not to lose out too much in a scenario where an insured car is written on, even on a fixed rate loan.


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    #9
    smcgiff
    Closed Accounts Posts: 5,943 ✭✭✭smcgiff


    Come to think of it, about 10 years ago I had a car about a month before a person crashed into the side of me and totalled it. I had fixed finance on it. I did a deal with the insurance company and had a payout in less than three months.

    The insurance company also left the car with me. The cheque plus the scrap was worth more than I paid for it plus finance owing.

    That I wasn't claiming personal injuries and wanted a quick settlement probably helped. But it seems a similar case to the OP.


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    #10
    Gunner1886
    Registered Users Posts: 6 ✭Gunner1886


    smcgiff wrote: »
    Come to think of it, about 10 years ago I had a car about a month before a person crashed into the side of me and totalled it. I had fixed finance on it. I did a deal with the insurance company and had a payout in less than three months.

    The insurance company also left the car with me. The cheque plus the scrap was worth more than I paid for it plus finance owing.

    That I wasn't claiming personal injuries and wanted a quick settlement probably helped. But it seems a similar case to the OP.

    Exact same case but I was left we 5k owing. I bought the car in 08, totalled in 10 was left with pre recession price and insurance paid out on current market value.


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    #11
    smcgiff
    Closed Accounts Posts: 5,943 ✭✭✭smcgiff


    Gunner1886 wrote: »
    Exact same case but I was left we 5k owing. I bought the car in 08, totalled in 10 was left with pre recession price and insurance paid out on current market value.

    Probably too late now, but I wasn't adverse to saying to the insurance company, 'ye know I'm not claiming for personal injuries, right' and I didn't accept their first valuation.

    Sorry to hear about this. It was a balls up not of your making.

    Unfortunately that's not going to matter to the company that now owns it.


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    #12
    Gunner1886
    Registered Users Posts: 6 ✭Gunner1886


    smcgiff wrote: »
    Probably too late now, but I wasn't adverse to saying to the insurance company, 'ye know I'm not claiming for personal injuries, right' and I didn't accept their first valuation.

    Sorry to hear about this. It was a balls up not of your making.

    Unfortunately that's not going to matter to the company that now owns it.

    I was really only a kid at the time and didnt claim personal injuries either, I guess I am stuck paying it so. Thanks for the advice.


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    #13
    smcgiff
    Closed Accounts Posts: 5,943 ✭✭✭smcgiff


    If you think you could borrow an amount offer it to the finance company, say 60% of amount outstanding.


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