# Help....car with outstanding finance



## adamvr619 (Jun 12, 2010)

I will hold my hands up and take all that you have to say IM AN IDIOT and dont I know it.

I recieved a phonecall today from first response saying that there is outstanding finance on my car from a previous owner. When I aquired the car I did a basic hpi (didnt realise it doesnt include finance check) and it came back clear so I got it. It was sold to me without me knowing and it was a private sale.

Where do I stand and instead of anyone saying they will want it back as I already know that even though they havent asked for it yet.

Has anyone or does anybody know of someone who has been in this situation and managed to keep the car. btw the car is a focus st170 worth around 1300 quid.


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## adamvr619 (Jun 12, 2010)

Anybody


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## MDC250 (Jan 4, 2014)

Gutted pal :-(

Are you saying that's what the car is worth or what's outstanding on finance?


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## adamvr619 (Jun 12, 2010)

I dont know whats outstanding but its worth about that. The finance was took out feb 2013 and the guy I got it iff got it march 2013 not one payment made on it


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## Guitarjon (Jul 13, 2012)

Sorry to hear this mate. Rather bad of the previous owner. I know I looked into selling my car which had finance on it previously. 

I spoke to the finance people who said I would have to pay the remainder of the cars fianance before it would be mine to sell. I asked if I could sell it then use the money to pay them back which the replied no. I'd not 100% clued up on it but surely the seller has failed to sell you something legitamatly and it isn't completely legal? I maybe wrong but would it be worth speaking to the police about it (not the 999 number obviously). I decided it wasn't worth the hassle and kept the car. I didn't want to sell any way but had just been made redundant and was in panic mode. 

Hope somebody can put you straight on the actual rules and regs but the seller hasn't been honest. They should have at least allowed you to take on the remainder of the finance.


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## MDC250 (Jan 4, 2014)

Think the police won't be at all interested Guitarjon, civil matter.

All I was thinking is if the car is worth £1300 they would I'm guessing be putting it through an auction and maybe looking at I'm guessing mid hundreds to sell to trade?

If they want the car might be worth offering them around that to keep it but get them to confirm they release the car in consideration?


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## AllenF (Aug 20, 2012)

It may be a civil matter but isnt it also theft fraud and obtainining money by deception?? Worth a punt with plod


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## adamvr619 (Jun 12, 2010)

Guitarjon said:


> Sorry to hear this mate. Rather bad of the previous owner. I know I looked into selling my car which had finance on it previously.
> 
> I spoke to the finance people who said I would have to pay the remainder of the cars fianance before it would be mine to sell. I asked if I could sell it then use the money to pay them back which the replied no. I'd not 100% clued up on it but surely the seller has failed to sell you something legitamatly and it isn't completely legal? I maybe wrong but would it be worth speaking to the police about it (not the 999 number obviously). I decided it wasn't worth the hassle and kept the car. I didn't want to sell any way but had just been made redundant and was in panic mode.
> 
> Hope somebody can put you straight on the actual rules and regs but the seller hasn't been honest. They should have at least allowed you to take on the remainder of the finance.


Did you keep the car or did they take it back


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## MDC250 (Jan 4, 2014)

AllenF said:


> It may be a civil matter but isnt it also theft fraud and obtainining money by deception?? Worth a punt with plod


You would think it's self evident selling a car with outstanding finance would carry criminal culpability but don't think it's as easy as that.

No disrespect to the boys in blue but they stretched enough as is, they will not want to get involved in what they see as a civil matter.

Not wanting to rub salt into the wound OP, but suspect they will adopt a Caveat Emptor attitude.

Was just trying to think of a practical outcome...


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## Kerr (Mar 27, 2012)

MDC250 said:


> You would think it's self evident selling a car with outstanding finance would carry criminal culpability but don't think it's as easy as that.
> 
> No disrespect to the boys in blue but they stretched enough as is, they will not want to get involved in what they see as a civil matter.
> 
> ...


Agree.

Selling something that isn't yours is theft/fraud as far as I'm concerned.

It's sad that it is the innocent buyer at the end of the line that ends up liable for the loss.

I feel really sorry for you OP. I'd also assume a basic HPI check would also show up finance. I thought that was the first thing it triggered.

Have you got back in contact with the last owner who owes the money?

Maybe he sold it to you and was still paying the month payments up as he needed quick cash?

Hopefully the payments owed are small and the seller agrees to clear it.

Worst case the OP can pay and seek losses against the seller.

What a mess.


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## adamvr619 (Jun 12, 2010)

The finance was tajen out feb 2013 the guy I got it off bought it march 2013 and I got it april 2014 the finance chap didnt make one payment and the chap I got it off was unaware it had finance owed on it


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## adamvr619 (Jun 12, 2010)

There wasnt one payment made at all either


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## Kerr (Mar 27, 2012)

So how did the finance company track you down and not the last owner?

Do you know what money is owed on the car? 

If the finance was taken out 18 months ago and all interest added, I'm thinking that the money owed on the car will be well above current value?


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## uruk hai (Apr 5, 2009)

You may end up loosing your money on this one but I would get advice on what action if any you may be able to take. I have no doubt you've been defrauded out of your money and the seller misrepresented the car and the whole situation as it was never his car to sell.

A sickening lesson if any were needed, I feel really sorry for you fella.


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## Titanium Htail (Mar 24, 2012)

If no payment was made on it over time perhaps a Trading Standards issue, as said although they may not be obliged to divulge that information hiding it perhaps under the Sale of Goods Act may be worth some additional investigation.

Good luck. John Tht.


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## Otto (Feb 2, 2013)

You need to take the seller to a small claims court.
Costs around £70 to the best of my knowledge.
You'll more than likely win if you can prove/ support what you are saying with dates and concise information.
You will more than likely get the court rule that the finance people leave you alone and chase the previous guy and he will have to compensate you for your time/ effort/ stress in sorting the matter.

However, this said. Owing money to banks, finance firms and utilities etc is a civil matter hence they always pass these things to bailiffs etc. They often have poor success in courts so they often don't bother. With this said a court will likely be able to say what needs to be done but then is limited in it's ability to enforce the outcome.

Maybe a polite visit to the seller would be of use to explain it would be kind of him to sort the issue out..


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## danwel (Feb 18, 2007)

Otto said:


> You need to take the seller to a small claims court.
> Costs around £70 to the best of my knowledge.
> You'll more than likely win if you can prove/ support what you are saying with dates and concise information.
> You will more than likely get the court rule that the finance people leave you alone and chase the previous guy and he will have to compensate you for your time/ effort/ stress in sorting the matter.
> ...


That's definitley the way i would go. Although as said i'd try initially getting in touch with the seller and give him the benefit of doubt and get it sorted but failing that then small claims court it is


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## SteveTDCi (Feb 8, 2006)

Why not find output what the finance company want for the car, they are not daft enough to realise there isn't enough equity in the car. Then decide if it's worth paying to keep the car or if you just walk away and try and take the original guy to the small claims court to recover your costs.

Given he only had the car for a month I guess he knew exactly what he was doing.


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## uruk hai (Apr 5, 2009)

SteveTDCi said:


> Given he only had the car for a month I guess he knew exactly what he was doing.


I think this proves intent on the part of the seller.


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## swirlyboy (Apr 14, 2011)

I would suggest you have good title and legal ownership. The creditor that took out the finance no longer owns the vehicle and as such the asset is no longer his to be repossessed.


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## uruk hai (Apr 5, 2009)

swirlyboy said:


> I would suggest you have good title and legal ownership. The creditor that took out the finance no longer owns the vehicle and as such the asset is no longer his to be repossessed.


The person who took out the finance never owned the car, it was never his and should not have been sold without first settling any outstanding debt on the car. The car doesn't belong to the current keeper for the same reason, he is the registered keeper but not the owner !


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## MDC250 (Jan 4, 2014)

swirlyboy said:


> I would suggest you have good title and legal ownership. The creditor that took out the finance no longer owns the vehicle and as such the asset is no longer his to be repossessed.


Not sure it's as easy as that pal, otherwise kind of defeats the point of car being security on the finance...think you'll find the finance company could go after the car no matter what...hence my suggestion as to if it's worth a relatively small amount and if they do want to go after it might be worth offering them a token sum and I suspect they would wash their hands of it.

The issue of going after the seller is as always when considering suing an individual not just a matter of whether your claim would be successful but whether you will end up getting your money or a Pyrrhic victory and even more heartache when you can't successfully enforce any judgement or end up with sporadic 10p a month payments.


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## GleemSpray (Jan 26, 2014)

uruk hai said:


> The person who took out the finance never owned the car, it was never his and should not have been sold without first settling any outstanding debt on the car. The car doesn't belong to the current keeper for the same reason, he is the registered keeper but not the owner !


This. My thoughts are that the Finance company fully own the car and will probably now recover it from you unless you settle the outstanding finance or reach some other financial agreement with them.

it would be for you to then attempt to recover the funds that the previous "owner" obtained from you fraudulently / by deception. It was never his vehicle to sell. What he did is little better than knowingly selling you a stolen car.

It's a rotten thing for you to have experienced.


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## GleemSpray (Jan 26, 2014)

swirlyboy said:


> I would suggest you have good title and legal ownership. The creditor that took out the finance no longer owns the vehicle and as such the asset is no longer his to be repossessed.


No.

Otherwise you or I could get a car on finance today, then sell it for less than the loan value and pocket the cash, whilst telling the Finance company "go after the unwitting new owner for the difference!"

The vehicle itself ALWAYS remains the property of the Finance company until the loan is repaid.


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## Bigpikle (May 21, 2007)

CAB is where you need to go for advice - not a bunch of people who have no understanding of the complexities of finance agreements and law of HP.

Start with this...
http://www.adviceguide.org.uk/engla...n_e/the_vehicle_is_still_on_hire_purchase.htm


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## sheady82 (Jan 15, 2014)

i was in the same predicament i had got a passat tdi on a w plate and i had done a text check etc same didnt realise this diod not include any finance and the guy i got the car off had took a logbook loan out on the vehicle a month before i had got it , long story short tried everything to no avail the loan company wanted me to buy the car at £930 even though they had sent me details regarding the loan and the loan was for just over £500 in the end i ended up scrapping it


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## polac5397 (Apr 16, 2014)

been there got that tshirt unfortunately, the clause in the finance agreement will say goods remain their property until paid for. I even went to court and tried to dispute under the police property act and got absolutely no where. just a thought may be worth asking the finance company how much that car/ finance actually stands them will be a lot less than you think. Done that for a friend of mine the settlement was 4500k. on ringing them they accepted 1200 big difference.

best of luck mate getting sorted


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## swirlyboy (Apr 14, 2011)

GleemSpray said:


> No.
> 
> Otherwise you or I could get a car on finance today, then sell it for less than the loan value and pocket the cash, whilst telling the Finance company "go after the unwitting new owner for the difference!"
> 
> The vehicle itself ALWAYS remains the property of the Finance company until the loan is repaid.


Are you a solicitor? I'm guessing not.


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## Rabidracoon28 (May 31, 2012)

swirlyboy said:


> Are you a solicitor? I'm guessing not.


Maybe not but advice given is spot on Sponge Jockey


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## swirlyboy (Apr 14, 2011)

Rabidracoon28 said:


> Maybe not but advice given is spot on Sponge Jockey


Who rattled your cage?

Post above with the link to the CAB might be worth a read.


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## Rabidracoon28 (May 31, 2012)

swirlyboy said:


> Who rattled your cage?


Same person that rattled yours


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## GleemSpray (Jan 26, 2014)

swirlyboy said:


> Are you a solicitor? I'm guessing not.


I never claimed to be, but the situation that I used as an example is correct.

The advice that I gave is also correct. The car would originally have been acquired via a secured loan and that remains intact. The car still belongs to the finance company and wasn't the property of the original loanee to sell.

"_ I would suggest you have good title and legal ownership. The creditor that took out the finance no longer owns the vehicle and as such the asset is no longer his to be repossessed._ " This is wrong, it never was his, he never owned it.

As above and as per my original post - it was the subject of a secured loan and the "owner" is and remains the finance company until someone settles the finance and they then sign ownership over.

You don't need to be a Solicitor - this is very basic stuff which applies to any secured loan, whether it be a car loan or a mortgage.


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## SteveTDCi (Feb 8, 2006)

swirlyboy said:


> Post above with the link to the CAB might be worth a read.


Cab ain't going to help, the car is owned by the finance company, end of. If the op wants to keep the car he is going to have to negotiate with the finance company. At the moment he owns nothing, the v5 does not give proof of ownership.


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## GleemSpray (Jan 26, 2014)

OP: The situation now is that the finance company has some degree of financial interest in a old (no disrespect) car that their loanee has sold on without their permission to you.

Being that you paid £1300 for it, then it may well cost them more than they are owed to send out a recovery tow-truck to your house and then put the car to auction and take a low value, as well as paying auction fees.

I would suggest that you might like to now consider doing this:

1) Firstly , put yourself in the finance companies position; they just want as much of their money back as they can - this is damage limitation for them so they would be very, very keen to have you pay them something / anything to avoid all the agro of reposition and then auction which will bring in a small percentage of £1300 or whatever the car is actually worth.

2) Then contact the finance company and tell them that you understand their position and that you ask them to consider your position that you bought the car in good faith and knew nothing of the outstanding finance.

3) See how they respond to that and tell them that you might consider purchasing the car from them, if the price was right.

Their financial interest could be far less than the £1300 value, as the previous "owner" might have put down a deposit upon purchase and he might just have made some payments.

There is a good chance they will say "give us X hundred pounds and its yours", which then gives you an option which might be cheaper than going out and buying another car if they were to repossess this one.

I know from my own experience of dealing with leasing and finance companies, they wont want to repossess if at all possible - they will just want to limit their losses, close the file and move on, so they will be very open to striking a deal that you and they can live with.

EDIT: my own experience is not of repossession btw !; it is my experience of dealing with them re the purchase of fleet cars / ex hire cars where the same situation exists: they would rather take a reduced price from the current driver and job done, than go through the time and effort of bringing the car back into their possession and then taking it to an auction house and then taking a big financial loss at auction.


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## Sicskate (Oct 3, 2012)

Have you contacted the previous owner yet?


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## dillinja999 (Aug 26, 2013)

sell it on quick


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## GleemSpray (Jan 26, 2014)

dillinja999 said:


> sell it on quick


So you are suggesting he does the same dirty trick on someone else then?

Steal their money to replace his own loss?

And knowingly (because you have now discussed it on a public Internet forum) sell a car that you know isn't yours to sell? . I think that the Police would call that obtaining money by deception.

Great Advice there.....


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## RedUntilDead (Feb 10, 2009)

Sorry if it has been mentioned, but what happens to the original owner who took out the finance and moved the car on? Just he/ she answer for nothing only a black mark on their credit history?


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## uruk hai (Apr 5, 2009)

RedUntilDead said:


> Sorry if it has been mentioned, but what happens to the original owner who took out the finance and moved the car on? Just he/ she answer for nothing only a black mark on their credit history?


Unless you could successfully inforce a court judgement and get the money then yes, the man who sold a car that wasn't actualy his may have got away with it with only a poor credit rating !

Sickening really 

(The thanks to Swilryboy was a mistake, I was attempting to touch the next page icon )


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## dillinja999 (Aug 26, 2013)

GleemSpray said:


> So you are suggesting he does the same dirty trick on someone else then?
> 
> Steal their money to replace his own loss?
> 
> ...


im sure im not the only one who would say that so i dont really get what you are getting your knickers in a twist over lol


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## sfstu (Aug 3, 2010)

dillinja999 said:


> im sure im not the only one who would say that so i dont really get what you are getting your knickers in a twist over lol


I wouldn't.

Bought a couple of s*** cars in the past, not nice to pass those problems onto anyone else....

What goes around, comes around. I sincerely believe that!


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## lofty (Jun 19, 2007)

I'm pretty sure the Consumer credit act implies that you have good title to a car if bought in good faith and with due diligence.If it was way below market value or you knew about the finance then that's different, but in your case it would seem you may have a good chance. Send the finance company a letter stating you bought the car in good faith, had an HPI check done and remind them of your rights under the 1974 Consumer Credit Act.Failing that negotiate as hard as you can with them, as already mentioned its a very small sum of money to them, so they ain't going to spend too much time and effort trying to recover it.


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## Bero (Mar 9, 2008)

Its a bit if a ******! I hope it works out in the end.

So what happens to the original keeper? Taking out a couple car loans and selling the car for cash every 6 years does not sound like a bad savings booster if you get off the hook with no come back (legal or civil) other than 6yr black mark on your credit file.



lofty said:


> I'm pretty sure the Consumer credit act implies that you have good title to a car if bought in good faith and with due diligence..


I would be very surprised if that was the case, but open to someone proving so. And acts don't IMExperence rely on implying things. They're ether stated, or not?


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## uruk hai (Apr 5, 2009)

Bero said:


> Its a bit if a ******! I hope it works out in the end.
> 
> So what happens to the original keeper? Taking out a couple car loans and selling the car for cash every 6 years does not sound like a bad savings booster if you get off the hook with no come back (legal or civil) other than 6yr black mark on your credit file.
> 
> I would be very surprised if that was the case, but open to someone proving so. And acts don't IMExperence rely on implying things. They're ether stated, or not?


Several years ago I became aware of a man who earned extra cash by doing exactly what you've just described, I was stunned by the amount of times he did it and the money he made. It came to an abrupt halt when he sold a car for £9000 to someone who turned out to be a Yardie gang member and drug dealer !

I've known someone who bought a car that became subject to a finance snatch back and the only thing he could do was pay the outstanding credit, he paid up but had a car that cost him a few thousand more than it was worth !


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## m4rkymark (Aug 17, 2014)

I don't think you can do very much until you know how the car was purchased - was it HP? was it a secured loan? was it leased? once you know more about these questions you can then look at what options are available to you.


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## Stezz (Apr 29, 2011)

lofty said:


> I'm pretty sure the Consumer credit act implies that you have good title to a car if bought in good faith and with due diligence.If it was way below market value or you knew about the finance then that's different, but in your case it would seem you may have a good chance. Send the finance company a letter stating you bought the car in good faith, had an HPI check done and remind them of your rights under the 1974 Consumer Credit Act.Failing that negotiate as hard as you can with them, as already mentioned its a very small sum of money to them, so they ain't going to spend too much time and effort trying to recover it.


Apart from the Consumer Credit bit, this is technically correct.

Taken from C.A.B



> If you want to keep the car
> 
> If you are a private buyer and you bought the car in good faith, you may be able to show that you have a legal right to own the car. This is called having good title.
> 
> ...


There are different rules if a logbook loan was taken out on the car.


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## lofty (Jun 19, 2007)

Bero said:


> Its a bit if a ******! I hope it works out in the end.
> 
> So what happens to the original keeper? Taking out a couple car loans and selling the car for cash every 6 years does not sound like a bad savings booster if you get off the hook with no come back (legal or civil) other than 6yr black mark on your credit file.
> 
> I would be very surprised if that was the case, but open to someone proving so. And acts don't IMExperence rely on implying things. They're ether stated, or not?


Badly worded on my part, it doesn't imply it is stated, this is taken from Trading standards literature.

The Consumer Credit Act 1974 gives 'good title' to the first private purchaser of a vehicle that later turns out to be subject to a claim by a finance provider. This means that if the previous owner sold the vehicle to you when there was finance outstanding and you were unaware of this, the finance provider cannot repossess the vehicle from you. Remember, this does not apply to vehicles that have been stolen, or vehicles that were subject to a lease or hire agreement.


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## Sicskate (Oct 3, 2012)

It's a crazy law, surly if you buy something on finance then the debt should be in the buyers name, not on the product/item. 

I assume they would have been chasing the original debt to the guy who bought it with the debt??

If I was to buy a £1500 sofa on strap, then sell it, the debt would still be in my name.

Why is it any different?


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## Bero (Mar 9, 2008)

Sicskate said:


> It's a crazy law, surly if you buy something on finance then the debt should be in the buyers name, not on the product/item.
> 
> I assume they would have been chasing the original debt to the guy who bought it with the debt??
> 
> ...


Car loans, like mortgages are typically secured against the asset unlike a personal loan like you would have for a sofa.

It (in theory) reduces the risk for the lender....if it all goes boobs up there is an underlying asset that can be repossessed and sold to recover any potential loss.


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