Car purchased, outstanding finance, can anything be done?

[Igurisu]

Not a new story, it's happened to many people but this has just happened to a friend at work.

She's just been to see me asking if there is anything she can do, the background.

Recently bought a car (around 4 weeks ago), was bought off Ebay from a trader/used car dealer in the Manchester area (not a private sale). Due to some misunderstanding, she thought hubby was doing the HPI check, he thought she was doing the HPI check, the end result is that no HPI check was done. Yesterday she has received a letter from a finance company with a form asking for lots of details to be completed.

I assume she has to complete the form and return it, but what would be the next step, and does she have any legal recourse to the trader who sold the car?

Any help or advice gratefully accepted.

[Roo]

If she's bought it from a dealer in good faith it's his problem not hers.

[DuraAce]

Indeed. It'll depend on the dealer though wont it? Are we talking a proper used car dealer with premises and a reputation or some cowboy who sells from carparks and dodgy addresses?

[All that jazz]

Roo said:

If she's bought it from a dealer in good faith it's his problem not hers.

This ^.

Under normal circumstances the finance co. can't repo it if you bought it in good faith. The finance co will just want to know as many details about who and where you bought it from and that will be the end of it.

[Terminator X]

Isn't this the norm for dealers though? Cars usually have finance on them and they just pay it off when the get the funds from new owner? As above, wouldn't normally be an issue as long as the trader is legit. I'd be a tad worried that the Finance Co have been in touch with new owner though

TX.

[Igurisu]

Thanks for the help so far everybody. IT looks to be quite a sizeable company based in Manchester city centre, they have 49 cars advertised on Autotrader so not a car park or back street job.

Should she go back to the dealer first and tell them about the letter, or get in touch with the finance company first?

[SistersofPercy]

We bought the boy a car from a local dealer, he'd had it for a couple of years when sadly it was written off. The Insurance company came back and said that it was still under finance. A call to the dealer revealed they had cocked up. Originally a lady had the car on finance, it was returned to the garage when she couldn't pay. We then bought the car for son which cleared the finance, only that had been overlooked and there was still a marker on it for finance.
Garage cleared it immediately and insurance then paid out. I've since found out it's not an unusual scenario.

We never heard from the finance company in the years we had the car but I'd hope it's probably something simple like a clerical error.

[Mastiff]

PM me the registration number - it may be on HPI as part of a stocking plan and will clear in a few days.

ETA - 4 weeks IS a long time but HPI are not without their faults - just interesting to see what kind of finance plan it's under.

I'll call them for her if you need me to.

[All that jazz]

Igurisu said:

Thanks for the help so far everybody. IT looks to be quite a sizeable company based in Manchester city centre, they have 49 cars advertised on Autotrader so not a car park or back street job.

Should she go back to the dealer first and tell them about the letter, or get in touch with the finance company first?

Call the finance co. You've nothing to worry about.

[btcc123]

Dealers often buy cars with outstanding finance but pay it off before selling it to someone else.

If the car has outstanding finance I would have thought the finance company are the legal owners of the car and could take it off you but also as the dealer you bought the car off was not the owner then he should not have sold the car to you.

I would ring the finance company first and speak to someone and tell them all the details of the purchase,what the finance companies position is,that you cannot afford to lose the car and the best way forward for you and the finance company.

Then I would ring the dealer telling him of the outstanding finance and the letter from the finance company and that you have spoken to them and see what he says.He will know that the car has outstanding finance and depending on his answer where he nay sort it out to your satisfaction and if not I would you tell him that he will be hearing from your solicitors and would ring the police as the dealer could have committed fraud,but not sure of this.

[Igurisu]

Thanks again to all who replied and thanks for the offer of the check Mastiff. She did the HPI check yesterday after receiving the letter and it is still showing as outstanding. She's going to contact the finance company and explain the situation to them first.

I'll keep you updated with progress.

[All that jazz]

Igurisu said:

Thanks again to all who replied and thanks for the offer of the check Mastiff. She did the HPI check yesterday after receiving the letter and it is still showing as outstanding. She's going to contact the finance company and explain the situation to them first.

I'll keep you updated with progress.

Make sure she says that she bought it in good faith. Don't mention about forgetting to do HPI checks etc. Let them ask the questions, don't volunteer info.

[Mastiff]

Igurisu said:

Thanks again to all who replied and thanks for the offer of the check Mastiff. She did the HPI check yesterday after receiving the letter and it is still showing as outstanding. She's going to contact the finance company and explain the situation to them first.

I'll keep you updated with progress.

No worries - let me know if I can help.

[ging84]

All that jazz said:

Roo said:

If she's bought it from a dealer in good faith it's his problem not hers.

This ^.

Under normal circumstances the finance co. can't repo it if you bought it in good faith. The finance co will just want to know as many details about who and where you bought it from and that will be the end of it.

I have a feeling this is completely wrong. There may well be some more hoops for the finance company to get all the right paper work to repo it, but ultimately if the finance company has a legal claim to it, no amount of good faith can stop them being able to claim it.
It's the dealers problem in so much as you can take legal action to recover you money, but if they are in financial difficulties already that is not a lot of comfort, as there is no gurantee you'd get it.
Chances though, if it's a dealer with a reasonable stock of cars, they have just ballsed up settling the finance and it will all get sorted out eventually.

[All that jazz]

ging84 said:

All that jazz said:

Roo said:

If she's bought it from a dealer in good faith it's his problem not hers.

This ^.

Under normal circumstances the finance co. can't repo it if you bought it in good faith. The finance co will just want to know as many details about who and where you bought it from and that will be the end of it.

I have a feeling this is completely wrong. There may well be some more hoops for the finance company to get all the right paper work to repo it, but ultimately if the finance company has a legal claim to it, no amount of good faith can stop them being able to claim it.
It's the dealers problem in so much as you can take legal action to recover you money, but if they are in financial difficulties already that is not a lot of comfort, as there is no gurantee you'd get it.
Chances though, if it's a dealer with a reasonable stock of cars, they have just ballsed up settling the finance and it will all get sorted out eventually.

I'm fairly confident because I was in the OPs myself many years ago when I bought a Vectra with outstanding finance. I was stting bricks about them repo'ing it but when I actually plucked up the courage and spoke to them they assured me there was nothing to worry about as there are laws protecting the innocent buyer in these situations and the most they can do is ask for details of whom and where you bought it from so that they can conduct their own investigations.

[AngryPartsBloke]

All that jazz said:

ging84 said:

All that jazz said:

Roo said:

If she's bought it from a dealer in good faith it's his problem not hers.

This ^.

Under normal circumstances the finance co. can't repo it if you bought it in good faith. The finance co will just want to know as many details about who and where you bought it from and that will be the end of it.

I have a feeling this is completely wrong. There may well be some more hoops for the finance company to get all the right paper work to repo it, but ultimately if the finance company has a legal claim to it, no amount of good faith can stop them being able to claim it.
It's the dealers problem in so much as you can take legal action to recover you money, but if they are in financial difficulties already that is not a lot of comfort, as there is no gurantee you'd get it.
Chances though, if it's a dealer with a reasonable stock of cars, they have just ballsed up settling the finance and it will all get sorted out eventually.

I'm fairly confident because I was in the OPs myself many years ago when I bought a Vectra with outstanding finance. I was stting bricks about them repo'ing it but when I actually plucked up the courage and spoke to them they assured me there was nothing to worry about as there are laws protecting the innocent buyer in these situations and the most they can do is ask for details of whom and where you bought it from so that they can conduct their own investigations.

If they can prove they have good title by demonstrating they purchased the car in good faith they will be fine.

I had a friend who went through this, to be honest i'm pretty surprised how often this seems to actually happen.

[spats]

Worth contacting the finance company, and the dealer too.

My mother in law bought a car privately and was given a fake letter saying the finance was paid off. It wasn't of course! The seller helpfully stopped answering the phone and didn't live locally either.

Told the finance company and they said inform the police, so we did that aswell.

A few months later a letter arrived saying the finance company were now pursuing the seller and they had no further interest in the car.

[ging84]

apparently it depends on the type of finance, the way they do logbook loans give them a much strong claim than how they normally do hp or pcp

[bad company]

Roo said:

If she's bought it from a dealer in good faith it's his problem not hers.

I would say that the finance company has the biggest problem.

Anyway from when I worked in car finance (some years ago) as long as she is an 'innocent purchaser' ie she didn't know about the outstanding finance she will be fine.

[martinbiz]

All that jazz said:

I'm fairly confident because I was in the OPs myself many years ago when I bought a Vectra with outstanding finance. I was stting bricks about them repo'ing it but when I actually plucked up the courage and spoke to them they assured me there was nothing to worry about as there are laws protecting the innocent buyer in these situations and the most they can do is ask for details of whom and where you bought it from so that they can conduct their own investigations.

This does only apply though when buying through a bona fide dealer though, if you bought it privately even in good faith and have a receipt that does not stop you losing the car, that's why HPI and the like exist in the first place.

As someone has said it also depends on the type of finance and if it is secured on the car. If there is a personal loan used to buy the car that is outstanding then all they can do is sue the person concerned, they have no claim on the car.