If a car is obtained fraudulently then sold on, who owns it?

[anonymous-user]

I shall try to keep this brief:

A person buys a relatively expensive car from a dealership using fraudulent means. It is purchased outright and the fraudster drives away away from the dealership with the car, 2 keys, V5 in their name etc.

They then quickly sell the car to someone else in a cash sale and puts the V5 in the buyers name. That new person then puts it up for sale.... etc

Who loses out here?

The dealership who sold the car have already lost out as the car was effectively bought with payment that turned out to be non-existent.

But the car that has been sold is actually legit in so far as it wasn't actually stolen, and the new owners haven't stolen from anyone if you see what I mean.

Is the car still the property of the dealership?

Complicated.

[grumbledoak]

It's not complicated. The car is still the property of the dealership.

You cannot sell what you don't own. Both transactions are fraudulent.

[anonymous-user]

Yup. The common law maxim nemo dat quod non habet is reinforced by statute:

Sale of Goods Act 1979

21 Sale by person not the owner.

(1) Subject to this Act, where goods are sold by a person who is not their owner, and who does not sell them under the authority or with the consent of the owner, the buyer acquires no better title to the goods than the seller had, unless the owner of the goods is by his conduct precluded from denying the seller’s authority to sell.

[anonymous-user]

Ok.

So because the car wasn't correcrly paid for in the first place it is still legally owned by the dealership.

Whoever is left holding it when the police come knocking is the one who loses out as it will be taken from them and returned to the dealership?

[anonymous-user]

Yes. Bad luck, but always a risk.

In the VERY unlikely event that the dealer agreed to pass title before receipt of actual funds, then the buyer could sell on, but few dealers would do that.

[CRA1G]

The dealer would have put the car on security alert with HPI... so imo the buyer hasn't been due diligent anyway...!

[a.lex]

HPI checking firms usually offer some sort of guarantee, but it will be limited. Best to read the fine print.

[anonymous-user]

Thanks to all for the input and of course Breadvan as usual for the legal details.

I haven't been stung personally, just so you know, but it's my old car that has been fraudulently obtained by quite suprising means.

Can't give any details at present as the police are involved.

[Sheepshanks]

Lord Marylebone said:

They then quickly sell the car to someone else in a cash sale and puts the V5 in the buyers name. That new person then puts it up for sale.... etc

That's surely a suspicious number of sales in what would have to be a short time?

Lord Marylebone said:

The dealership who sold the car have already lost out as the car was effectively bought with payment that turned out to be non-existent.

In what way was the payment non-existent such that it wouldn't be quickly uncovered?

[anonymous-user]

Sheepshanks said:

In what way was the payment non-existent such that it wouldn't be quickly uncovered?

I can't go into details now but I will update the thread next week.

The fraudulent payment was discovered within days, but by that point the buyer has driven away with their new car, both sets of keys, and the V5 has been put into their name, all within a couple of hours, because that's all it takes to process the sale.