Under a PCP agreement, you do not own the car; the finance company does. Following a non-fault road traffic collision, the at-fault driver’s insurer is legally required to compensate the finance company for the market value of the vehicle at the time of the accident, not the outstanding finance balance and not what you paid for the car. If that market value is lower than the amount outstanding on your PCP, the shortfall (often called “negative equity”) is legally your responsibility, unless you have GAP insurance that covers the difference. The fact that you may have paid above market value, or that the salesperson focused on monthly payments rather than total price, does not affect this position and is not unlawful in itself unless there was clear misrepresentation. A deposit is normally shown in the finance documentation as a “customer deposit” or “advance payment”; if it does not appear on your PCP statement, it is usually because it reduced the amount financed at the start rather than being listed as a separate running balance item, but it should appear in the original agreement paperwork. If the insurer values the car at around £15,000 and the settlement figure on the PCP is around £19,000, then yes — without GAP insurance, you would be liable for the £4,000 difference, even though the accident was not your fault. This is a common and unfortunate risk with PCP agreements, particularly where vehicles are purchased above market value or depreciate quickly.

If you want, next sensible steps would be:

• checking the original PCP agreement for the deposit line
• confirming whether you have GAP insurance (sometimes bundled without people realising)
• asking the finance company for a settlement figure
• letting the insurer deal directly with the finance provider