Discovered outstanding finance on my new car
Discussion
I bought a car from a dealer last month (£40k +). I've now discovered that there is outstanding finance on the car. I phoned the dealer who said that it was probably a clerical error and that he would sort it out. I did a basic check when i bought the car (not stolen, cat d etc) but didn't tick the finance box as I was buying from a dealer.
I spoke to the finance company who say that the car belongs to them. I told them that I bough the car in good faith from a dealer so I have good title. They disagree. The won't give me any details of amount outstanding. arrears etc due to data protection.
The dealer bought the car from a car auction earlier this year then sold the car to me. The dealer says that the auction house will pay off the finance if the original owner of the car doesn't settle the finance.
I don't think that the dealer has the money to refund my purchase price or to pay off the finance. I have spent a couple of thousand pounds with a main dealer sorting the car since I bought it.
Where do I stand?
Should I keep the car away from my home address (registered at DVLA)
Any advice please.
MM
I spoke to the finance company who say that the car belongs to them. I told them that I bough the car in good faith from a dealer so I have good title. They disagree. The won't give me any details of amount outstanding. arrears etc due to data protection.
The dealer bought the car from a car auction earlier this year then sold the car to me. The dealer says that the auction house will pay off the finance if the original owner of the car doesn't settle the finance.
I don't think that the dealer has the money to refund my purchase price or to pay off the finance. I have spent a couple of thousand pounds with a main dealer sorting the car since I bought it.
Where do I stand?
Should I keep the car away from my home address (registered at DVLA)
Any advice please.
MM
Don't worry too much. Let the dealer sort it. It sounds like there has been a cock up rather than fraud, and it's not on your part. If you try and hide the car it will just cause more problems, as if it goes as far as bailiffs then they will keep hassling you. Be honest with everyone, give the finance company the dealers name and they will try and sort it out with them. The last thing the finance company want is the car back. They would rather get their money.
Worst case scenario sounds like you will be taking legal action against the dealer. As it was not a private sale it's unlikely he will be gone. Just make sure you keep the pressure on them to sort it out.
Worst case scenario sounds like you will be taking legal action against the dealer. As it was not a private sale it's unlikely he will be gone. Just make sure you keep the pressure on them to sort it out.
The finance house association refused to set up a vehicle equivalent of the land registry and so the state legislated that if you are a private individual and by in good faith you get good title. Be polite and just keep repeating the facts, if they repossess the car fill your boots at their expense.
The dealer is legally liable, but you say he hasn't enough money to give you a refund or pay off the finance; He's hardly Evans Halshaw is he? He's gonna have to find the money or go bust.
If it's HP or proper credit you have 'good title' to the car. But my suspicion is that it may be a logbook loan, and the loan company will try to repossess the car at the address you have registered it with the DVLA. They will claim they own the car as a previous keeper gave them the V5, conveniently overlooking the fact that the V5 doesn't prove ownership. The amount of interest these companies charge is high and so the money owing on the car could be considerable and rising. They won't need a court order to repossess and they won't send bailiffs, just thugs. They can enter private property but they can't force locks so it will be safe in a locked garage. Even if car is locked on drive they can winch it onto a lorry.
I'd be careful where I parked the car and keep an eye-out for shifty rogues until this matter is resolved.
If it's HP or proper credit you have 'good title' to the car. But my suspicion is that it may be a logbook loan, and the loan company will try to repossess the car at the address you have registered it with the DVLA. They will claim they own the car as a previous keeper gave them the V5, conveniently overlooking the fact that the V5 doesn't prove ownership. The amount of interest these companies charge is high and so the money owing on the car could be considerable and rising. They won't need a court order to repossess and they won't send bailiffs, just thugs. They can enter private property but they can't force locks so it will be safe in a locked garage. Even if car is locked on drive they can winch it onto a lorry.
I'd be careful where I parked the car and keep an eye-out for shifty rogues until this matter is resolved.
The lender is a small bank specialising in asset finance. They won't give me information about the outstanding finance, but my thinking is that it's probably not a logbook loan. The hpi check shows that is a 60 month agreement taken out a few months before the previous owner sold the car tat the auction.
I made sure that the lender noted that I was claiming that I had good title as I bought in good faith from a dealer.
I made sure that the lender noted that I was claiming that I had good title as I bought in good faith from a dealer.
mirandamilly said:
The lender is a small bank specialising in asset finance. They won't give me information about the outstanding finance, but my thinking is that it's probably not a logbook loan. The hpi check shows that is a 60 month agreement taken out a few months before the previous owner sold the car tat the auction.
I made sure that the lender noted that I was claiming that I had good title as I bought in good faith from a dealer.
I'm no expert on these matters but that sounds exactly like a logbook loan to me.I made sure that the lender noted that I was claiming that I had good title as I bought in good faith from a dealer.
Unless the previous owner bought the car at the same as the loan was taken out?
mirandamilly said:
Doesn't it also sound like a normal finance agreement? 60 month, proper authorised lender? I had thought that logbook loans were like payday loans, wonga etc.
I'm scared of bailiffs showing up at my home.
Yes, fair point re: the 60 month term.I'm scared of bailiffs showing up at my home.
I was referring to a loan being taken out against a vehicle already owned.
If the loan was taken a few months before the car going to auction, it doesn't sound like the loan was used to actually purchase the car, more that the car was paid for already and the previous owner took out a loan against it for other purposes. Although you don't mention how long the previous owner had the car, so I could be wrong on that.
Dixy said:
The finance house association refused to set up a vehicle equivalent of the land registry and so the state legislated that if you are a private individual and by in good faith you get good title. Be polite and just keep repeating the facts, if they repossess the car fill your boots at their expense.
Well, that's reassuring, that is a relief. You know about these things do you?
What exactly is your specialist knowledge and authority on this subject?
The Mad Monk said:
Well, that's reassuring, that is a relief.
You know about these things do you?
What exactly is your specialist knowledge and authority on this subject?
Section 27 of the Hire Purchase Act (1964). This says that if you buy a car in good faith and the vendor doesn’t tell you of any outstanding finance agreements, you still have good title to the car.You know about these things do you?
What exactly is your specialist knowledge and authority on this subject?
It is illegal to sell a car with outstanding finance, all finance has to be paid off before the car is sold.
KevinCamaroSS said:
Section 27 of the Hire Purchase Act (1964). This says that if you buy a car in good faith and the vendor doesn’t tell you of any outstanding finance agreements, you still have good title to the car.
It is illegal to sell a car with outstanding finance, all finance has to be paid off before the car is sold.
I used to work in the hp industry and you are right, the op would be regarded as an innocent purchaser.It is illegal to sell a car with outstanding finance, all finance has to be paid off before the car is sold.
I'm not sure about log book loans tho. They weren't around when I was in the business.
Log book loans are a 'bill of sale' a totally outdated concept that goes back to Victorian times.
From what I have seen if there is a log book loan attached to the car the lender can repossess without any kind of formal process and with no means of redress by the current owner. Totally unfair and wrong and is due to be addressed by parliament but currently still in effect.
Edit: https://www.the-fca.org.uk/firms/consumer-credit-r...
From what I have seen if there is a log book loan attached to the car the lender can repossess without any kind of formal process and with no means of redress by the current owner. Totally unfair and wrong and is due to be addressed by parliament but currently still in effect.
Edit: https://www.the-fca.org.uk/firms/consumer-credit-r...
Edited by wgl2014 on Sunday 3rd July 16:33
Does sound like a log-book loan to me.
I find it very worrying that the law provides such little protection for private buyers, but this case looks to have been through an independant specialist, which is even more worrying. Given log-book loans won't alway appear on the HPI check what protection can a buyer have, other than buy new, or through the official dealer network, who would presumably stand behind any car?
I find it very worrying that the law provides such little protection for private buyers, but this case looks to have been through an independant specialist, which is even more worrying. Given log-book loans won't alway appear on the HPI check what protection can a buyer have, other than buy new, or through the official dealer network, who would presumably stand behind any car?
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