Dealer not paid trade in finance settlement
Discussion
Hello
I have been advised to come here to try and get some help or opinions on an issue i have, so hope that cool
So I had a Honda cbr650f on finance with Honda
I got made redundant past week so made moves to reduce out goings, so approached a few local dealers and agreed on a price on Wednesday the 2nd of August.
So the Figures
Agreed price for bike £5,150
Amount owed on settlement £4,265.29
and the balance in my pocket.
The Dealer agreed to pick the bike up on Friday evening 8pm 4th August. Upon collection, he gave me a cheque for my portion of the sale and a written statement that he would pay the Finance settlement by August 8th.
I get this Email on August 9th
"Hi Steven,
on the 10th of August, i noticed the bike was listed on Autotrader so I asked if the finance had been cleared to which I got a reply of
"Hi Steven,
Yes, the finance was paid and cleared yesterday."
Well every day this week i have phoned Honda to find out if it has been cleared and it hasn't the Dealership has closed for 2 weeks for refurbishment with no person taking phone calls, I have got the mobile number and called the guy who I have been with dealing with who is in France whilst the refurb is going on and he states the balance was paid by bank transfer last week.
so where do i stand on this?
Thanks for reading
I have been advised to come here to try and get some help or opinions on an issue i have, so hope that cool
So I had a Honda cbr650f on finance with Honda
I got made redundant past week so made moves to reduce out goings, so approached a few local dealers and agreed on a price on Wednesday the 2nd of August.
So the Figures
Agreed price for bike £5,150
Amount owed on settlement £4,265.29
and the balance in my pocket.
The Dealer agreed to pick the bike up on Friday evening 8pm 4th August. Upon collection, he gave me a cheque for my portion of the sale and a written statement that he would pay the Finance settlement by August 8th.
I get this Email on August 9th
"Hi Steven,
- We have had trouble sorting the finance out for this bike, can you please send the letter from Honda detailing the financial details."
on the 10th of August, i noticed the bike was listed on Autotrader so I asked if the finance had been cleared to which I got a reply of
"Hi Steven,
Yes, the finance was paid and cleared yesterday."
Well every day this week i have phoned Honda to find out if it has been cleared and it hasn't the Dealership has closed for 2 weeks for refurbishment with no person taking phone calls, I have got the mobile number and called the guy who I have been with dealing with who is in France whilst the refurb is going on and he states the balance was paid by bank transfer last week.
so where do i stand on this?
Thanks for reading
I suspect you don't stand anywhere until it is clear if the finance was cleared or not. You don't yet know if the payment was made, if the payment went to the right party, or if this is an admin/processing issue with the finance company.
I would call the finance company, advise them of what you have been told about the payment being made, and ask them to make a note of this on your file. Then I'd chase it up as soon as you can with the dealers. Technically, I would guess that as they haven't paid in full for the motorbike that they don't have the right to sell it. Legally, the motorbike is probably still owned by you or the finance company - that will depend on the agreement you signed.
I would call the finance company, advise them of what you have been told about the payment being made, and ask them to make a note of this on your file. Then I'd chase it up as soon as you can with the dealers. Technically, I would guess that as they haven't paid in full for the motorbike that they don't have the right to sell it. Legally, the motorbike is probably still owned by you or the finance company - that will depend on the agreement you signed.
I would worry.
Many moons ago I worked for a small company. The spare car, and I was not particularly interested in driving the 110hp Passat. We did a deal and the Passat got traded in for an E320 cdi Merc. Good upgrade. He gave a decent price for the Passat as well.
As time goes by reminders are sent for the finance company on the Passat. First one was oh I'll sort it. Second one was I thought you realised that I did not take it in p/ex I just agreed to sell it for you.
War kicks off after that, when he rings to say the trader who was selling the car for him had gone pop. Did we want the car back or to undo the deal. Everyone most unhappy, went legal for a while, but our lawyer was having rings run around him by this chaps.
I collected the Passat. It had done a few thousand miles, stank of cigarette smoke, and needed Oil, Coolant and Washer fluid. Clearly not being trying that hard to sell it.
Probably all is well with OP. But I would worry.
Many moons ago I worked for a small company. The spare car, and I was not particularly interested in driving the 110hp Passat. We did a deal and the Passat got traded in for an E320 cdi Merc. Good upgrade. He gave a decent price for the Passat as well.
As time goes by reminders are sent for the finance company on the Passat. First one was oh I'll sort it. Second one was I thought you realised that I did not take it in p/ex I just agreed to sell it for you.
War kicks off after that, when he rings to say the trader who was selling the car for him had gone pop. Did we want the car back or to undo the deal. Everyone most unhappy, went legal for a while, but our lawyer was having rings run around him by this chaps.
I collected the Passat. It had done a few thousand miles, stank of cigarette smoke, and needed Oil, Coolant and Washer fluid. Clearly not being trying that hard to sell it.
Probably all is well with OP. But I would worry.
Bit late now, but why?
Why on earth would anyone ever let the dealer settle the finance on their behalf?
"Pay me all the money and I'll settle with the finance company."
OK, the dealer my not be keen if the finance is secured on the vehicle, but you're still responsible for the finance if the dealer doesn't settle up. So if the dealer doesn't want to do it this way, the dealer misses out. Otherwise you run the risk of losing the bike and still being liable for the finance.
If the dealer doesn't like it, he settles the finance with you present. Or pays you cash and you settle the finance with him present. If none of these are acceptable then alarm bells should be ringing. Plenty of ways around the issue without leaving yourself wide open.
In this case, the dealer may be intending to pay the finance off when he sells the bike - you've provided him with an excellent way of keeping his inventory cost down.
Why on earth would anyone ever let the dealer settle the finance on their behalf?
"Pay me all the money and I'll settle with the finance company."
OK, the dealer my not be keen if the finance is secured on the vehicle, but you're still responsible for the finance if the dealer doesn't settle up. So if the dealer doesn't want to do it this way, the dealer misses out. Otherwise you run the risk of losing the bike and still being liable for the finance.
If the dealer doesn't like it, he settles the finance with you present. Or pays you cash and you settle the finance with him present. If none of these are acceptable then alarm bells should be ringing. Plenty of ways around the issue without leaving yourself wide open.
In this case, the dealer may be intending to pay the finance off when he sells the bike - you've provided him with an excellent way of keeping his inventory cost down.
Firstly check that the company you sold the bike to is FCA registered here https://register.fca.org.uk/
You have done the deal correctly if the company is FCA registered as they can not take delivery of the goods until either the finance is settled or they have the goods in which case they make payment directly to the finance house. No company will take the goods give you the cash and ask you to settle that's open to abuse.
What I would suggest has happened here is that the settlement letter from Honda finance will have a settlement date on it (usually 2 to 3 weeks after the settlement letter is given). The dealer will have seen this due by date and thought to himself that he can keep and use your money until the settlement is due. This is not the case but is common practise by some dealers especially if their cash flow is not strong.
If they are FCA registered tel them that you want proof of the settlement in writing and if you don't get it you will make a complaint to the FCA.
If the company is not FCA registered and they dont pay it off your only option is civil action via the courts.
You have done the deal correctly if the company is FCA registered as they can not take delivery of the goods until either the finance is settled or they have the goods in which case they make payment directly to the finance house. No company will take the goods give you the cash and ask you to settle that's open to abuse.
What I would suggest has happened here is that the settlement letter from Honda finance will have a settlement date on it (usually 2 to 3 weeks after the settlement letter is given). The dealer will have seen this due by date and thought to himself that he can keep and use your money until the settlement is due. This is not the case but is common practise by some dealers especially if their cash flow is not strong.
If they are FCA registered tel them that you want proof of the settlement in writing and if you don't get it you will make a complaint to the FCA.
If the company is not FCA registered and they dont pay it off your only option is civil action via the courts.
Forums | Speed, Plod & the Law | Top of Page | What's New | My Stuff