Liability for credit agreement for car insurance?

[vegus]

My son passed his test in January and

 

signed up for very expensive car insurance, that he agreed to pay monthly - the total cost was £4000.

 

Against my advice he signed up, via the internet for this credit agreement.

 

His car broke down and as not financially worth repairing, so was scrapped.

 

He is being chased by the insurance comapny for £3000. Any advice please???

 

He hasnt got £3000 and would not have been able to afford the £400 per month in any case.

 

Any advice gratefully accepted, given I am getting calls from debt collectors for this.

 

Does he have to pay the whole amount given he is not accessing the services from the finance company?

Is he liable for the whole amount?

 

I also pay my insuranec by installments (fianance) and not sure if my car will pass its MOT

- will I have to pay the whole years premuims if my car has to be scrapped????

 

Many thanks

 

Vegus

[AndyOrch]

Hi vegus

 

It all depends on how the finance for the insurance was arranged...when you enter an agreement to pay monthly the insurance finances it with external credit so they get their money up front.You then have a debt/agreement with the finance company not the insurance company so you need to read the Terms and Conditions of that agreement that your son accepted ...in particular the section on cancellation.

 

Regards

Andy