Car Finance and repossession question.

[towman]

Help !

This gets a bit complicated, but bear with me...

BiL bought a car for FiL on finance. Purchase price was c£7000. BiL has now seperated from wife and living in Channel Islands. He has stopped finance payments. £2500 outstanding debt. Can the car be repossessed?
Can it be re-financed? Any thoughts or ideas welcome.

Steve

[rsvmilly]

It looks like he's paid half the finance so he can hand the car back to the finance company.

[jasandjules]

I would assume it can be repossed, the HPI agreement would state that upon default the possession of the goods would return to them (they don't actually lose title until you have made the final payment).

However, if you contact them, I am sure they would be happy for FiL to take over the payments, though I imagine they would need to create a new HPI (depends on the company though, they may ignore that minor technicality...)

Jas

[Balmoral Green]

IIRC, once you have paid a third of the total amount payable they cannot reposess the car without a court order. Once you have paid half, you can hand the car back and walk away (very usefull if the car has negative equity, worth less than is owed). If there is £2500 outstanding, just get a fresh loan and pay it off directly.

[trax]

I got lucky with that rule (hand it back after paying more than 1/3.

It was with an escort years ago, and we wanted to buy a new car, but was in negativve equity. The guy in the dealer that we were buying the new car from sugested this, and it saved us alot of money.

The finance company were not happy, and tried to suggest that the rule was only for people who were strugling to pay the finance, tough luck on them. They did blacken my partners credit record though, unbeknown to us (it was in her name), until we got a credit score a few years later, they had put on the credit list that we still owed them the diference. A quick call to tell them the errors of their ways got it taken of.

[rsvmilly]

You don't say if they want to keep the car. If they do then I dare say that by mutual consent, the finance agreement could be assigned to whoever wants it.

[markmullen]

The halves and third rule only applies to proper HP agreements, not motor loans (the paperwork looks similar and will come from the same provider but they are different. As a very general rule the more of a dodgepot you are the more likely to get accepted on a motor loan rather than HP).

Also whilst the finance houses deny they do it they do look unfavourably on a VT (voluntary termination) and as such you are much less likely to be accepted on HP in future, more likely on a motor loan.

[towman]

Thanks to all for the advice.

Steve