Car Deal not as it seemed

[MikesVikes]

My son got a job and bought his first car about a year ago. He picked out a car down in Iowa, not to far from us, from a body shop. They buy cars that were in accidents and fix them up. The kid found a 2007 vehicle with less than 30,000 miles on it. It was in great condition. He got the car, knowing that it was a prior salvaged vehicle. The title states this.

 

The dealer suggested a credit union that they have worked with in the past. They send alot of business their way it seemed. The kid is offered and buys GAP insurance. If he gets into an accident and owes more than the car is worth, the gap pays off the difference.

 

Of course that is exactly what happened a few months ago. He got into the accident and rolled the car several times. Witnesses say that they didn't think anyone would walk out of the car alive, but luckily he wasn't hurt much at all. Very lucky that is.

 

Now we get informed that the GAP coverage doesn't cover prior salvage vehicles. He was sold the coverage and I know for a fact that the CU knew that it was a salvaged vehicle. I have a copy of the contract that he signed (and I co-signed) and there's plenty of verbage in it saying that we are basically screwed.

 

How would you handle it? Should we get a complete refund of GAP premium? Or should they pay more for the mixup?

Edited April 23, 2010 by MikesVikes

[Azazello1313]

might wanna talk to a lawyer. the insurer may not be liable, but the person who sold him the gap policy might be. and I would be looking for more than the cost of the policy.

[westvirginia]

might wanna talk to a lawyer. the insurer may not be liable, but the person who sold him the gap policy might be. and I would be looking for more than the cost of the policy.

 

+1. I could be all wet but IICC from my business law class the dealership represented the gap as "X benefit for $Y" and they might be on the hook for the difference.

[Trots]

If you can prove that the CU knew the car had a salvage title but still accepted the Gap policy, I would think that the CU should be forced to write off any remaining balance on the loan agreement. I would get an attorney if they do not comply.

[wiegie]

How would you handle it? Should we get a complete refund of GAP premium? Or should they pay more for the mixup?

I don't think it is enough that you only get back the GAP premiums that were paid--I think they should pay out as though the insurance were valid the whole time. Do you really think that the CU would have automatically refunded the premiums if he had never tried to use the insurance? No way. They were happy to keep unethically pocketing his money for non-existent insurance coverage until they got called on it.

 

I'd let them know that you expect them to uphold the coverage and pay out his claim.

 

If your interaction with them gets you no-where, I think you should consider talking to one of your local television news programs--banks are very unpopular right now and another story of a financial institution screwing over the little guy could be a nice story for them to cover.

[Youre Going Down]

I am a Finance Mgr at a car dealership and salvage titled vehicles are not covered at all by gap. The credit union selling gap with the loan should be responsible for the difference but I bet somewhere in the contract that was signed their will be an exclusion that will get the credit union out of this.

Edited April 27, 2010 by Youre Going Down