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    • AshTheLegend
    • By AshTheLegend 7th Mar 17, 2:49 AM
    • 7Posts
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    AshTheLegend
    Purchased a car, Didnt know it had Outstanding Finance
    • #1
    • 7th Mar 17, 2:49 AM
    Purchased a car, Didnt know it had Outstanding Finance 7th Mar 17 at 2:49 AM
    Hi all,

    New member here but I've been reading this forum for years.

    I've bought a car a month ago. The seller informed me over the phone that the car was HPI clear and said he had a copy of the report. I forgot to ask about it when actually collecting the car.

    A friend of mine reminded me about the HPI status (if it's damage repaired etc). It kept bugging me so I finally checked it. Turns out the car has outstanding finance with FCE Bank. The agreement type is 'conditional', whatever that means.

    What I want to know is, where do I stand with this. I've come across various posts about innocent buyers and good faith etc. I haven't yet phoned them up. I want to know what to expect. Has anyone ever gone through this before?

    Thanks
    Ash
Page 2
    • AshTheLegend
    • By AshTheLegend 8th Mar 17, 1:56 PM
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    AshTheLegend
    The car is pretty mint to be honest.

    When you say that the seller is in a lot of trouble, I was thinking about that. Theoretically he can have the boom thrown at him if they trace him, but realistically what will actually happen to him? Sod all most likely. Ruined credit history which renews after 6 years?
    • Agricolae
    • By Agricolae 9th Mar 17, 1:15 AM
    • 362 Posts
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    Agricolae
    The car is pretty mint to be honest.

    When you say that the seller is in a lot of trouble, I was thinking about that. Theoretically he can have the boom thrown at him if they trace him, but realistically what will actually happen to him? Sod all most likely. Ruined credit history which renews after 6 years?
    Originally posted by AshTheLegend
    Well there is that - assuming he doesn't pay up when/if the lender finds him of course. He will get a default registered on his credit file and he'll probably be hounded by debt collectors/taken to court. If it goes to court he'll get a CCJ and if he's really unlucky he might get a charge put on his house (if he has one) or money will be taken out of his pay packet directly to pay the lender (if he has a job).

    However at the moment we don't know if he's not going to pay his debt, so none of that may happen. What he's done at the moment is essentially "steal" the car, because it wasn't his to sell. If you lent me your car for 100 a month and then I sold it without telling you I doubt you'd be very pleased!

    It's called "conversion" and depending on the situation it can be a civil or a criminal matter. So this rogue may be in more trouble than you think! It's a good thing you spoke to the finance company, as I've heard some stories where the first time a person finds out their new car had finance on it is when they get pulled over by the police.
    • Stevie Palimo
    • By Stevie Palimo 9th Mar 17, 8:32 AM
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    Stevie Palimo
    I will be the first to admit that I don't know everything, in fact there are without a doubt, many things that I know little or nothing about.

    However, as you don't appear to know about S27 of the Hire purchase act, don't you think that it's also a possibility that the purchaser of the car you refer to was also unaware of this legislation and simply let the vehicle go without fighting for it?

    And from the link provided by soolin earlier:

    Can you provide anything apart from unverifiable second hand knowledge to actually back up your claim that what I am posting is "tripe"?
    Originally posted by shaun from Africa
    I made it quite clear in my post that it was a friend who had the car taken away by a finance Company and not me so I obviously did not just let it go as per you part above, This part also goes back to your accusation above of me listing unverifiable second hand knowledge.

    According to Shaun none of us need ever do a HPI check ever again when purchasing a car privately, I know what I would rather do and that is ignore this carp and do things by the book so that I know I am fully covered as most of us know that where there are laws for certain things they may not always be picked up upon in the correct manner.

    Further on about none of us needing a HPI check then why is that if a car is pulled for this or at the time the Police see it as stolen due to the finance Companies report do you run a risk of it being taken away and in some cases, I said some cases will people not see the cars back and this is not just the fact that they were purchased from a trade dealer, Is it because there are many cases not just my friends whereby people have had a car taken away and adding a part of legislation here that not many would know about makes no difference with a view to stop this.

    (Text removed by MSE Forum Team)
    Last edited by MSE ForumTeam5; 12-03-2017 at 9:43 AM.
    • Marktheshark
    • By Marktheshark 9th Mar 17, 9:53 AM
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    Marktheshark
    Depending which firm is sent to repossess the car, one tries voluntary methods first and the larger one sends someone to attach a GPS tracker and lifts it when its parked up somewhere they can get to it.
    Brexit will become whatever they invent it to be.
    • George Michael
    • By George Michael 9th Mar 17, 10:19 AM
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    George Michael
    Depending which firm is sent to repossess the car, one tries voluntary methods first and the larger one sends someone to attach a GPS tracker and lifts it when its parked up somewhere they can get to it.
    Originally posted by Marktheshark
    It appears to be the case that the finance company have accepted the OP as "the first innocent purchaser" under the Hire purchase act and because of this, they acknowledge the fact that they now have no claim either against the OP or against the car itself.
    Provided that this is the case (and it would advisable for the OP to get this in writing if possible), there shouldn't be any more repossession attempts unless the matter is taken to court first.
    • wealdroam
    • By wealdroam 9th Mar 17, 1:38 PM
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    wealdroam
    Depending which firm is sent to repossess the car...
    Originally posted by Marktheshark
    Why would any firm be sent to repossess the car?
    • steampowered
    • By steampowered 9th Mar 17, 2:51 PM
    • 1,272 Posts
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    steampowered
    The legislation is crystal clear. Shaun provided a link earlier in the thread.

    If you buy a motor vehicle in good faith and without notice of a hire-purchase agreement, you get good title. Even if the car was still subject to finance and even if the car did not belong to the seller.

    I am sure some finance companies might hope people are not aware of this and try to recover the vehicle anyway. But the law is crystal clear they are not entitled to do this. If the car were to be repossessed in these circumstances that would be conversion at best or theft at worst.

    The rules are different if the lender took security over the car by a bill of sale. This is a different legal mechanism to a leasing arrangement or hire-purchase. In this case the Hire-Purchase Act 1964 would not apply. So if the lender gets in touch with the Op, the Op needs to ask exactly what security the lender has over the car.

    Of course doing a HPI check is a good idea to avoid getting into this kind of mess in the first place.
    Last edited by steampowered; 09-03-2017 at 2:54 PM.
    • steampowered
    • By steampowered 9th Mar 17, 2:54 PM
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    steampowered
    It's called "conversion" and depending on the situation it can be a civil or a criminal matter.
    Originally posted by Agricolae
    Hello - just so that you are aware, "conversion" is civil law only. The criminal law equivalent of conversion is theft.

    Of course it is possible for a person to commit criminal theft and civil conversion at the same time.
    • shaun from Africa
    • By shaun from Africa 9th Mar 17, 3:01 PM
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    shaun from Africa
    The legislation is crystal clear. Shaun provided a link earlier in the thread.

    If you buy a motor vehicle in good faith and without notice of a hire-purchase agreement, you get good title. Even if the car was still subject to finance and even if the car did not belong to the seller.
    Originally posted by steampowered
    Except if the finance application was fraudulent (as pointed out to me by unholyangel).
    • steampowered
    • By steampowered 9th Mar 17, 3:09 PM
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    steampowered
    Except if the finance application was fraudulent (as pointed out to me by unholyangel).
    Originally posted by shaun from Africa
    Unless I am missing something, I am not sure why that would make a difference?

    The legislation only focusses on the purchaser - i.e. the purchaser gets good title if he buys the vehicle in good faith without notice of the finance.
    • unholyangel
    • By unholyangel 9th Mar 17, 3:46 PM
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    unholyangel
    Unless I am missing something, I am not sure why that would make a difference?

    The legislation only focusses on the purchaser - i.e. the purchaser gets good title if he buys the vehicle in good faith without notice of the finance.
    Originally posted by steampowered
    Because certain mistakes can void a contract, including one where they are mistaken as to the identity of the other party (for example when someone uses a driving licence in the name of someone else to get a car under a hire purchase agreement).

    If a contract is void (rather than voidable), the law treats it as if it was never formed/valid. Meaning there was no HP agreement/conditional sale agreement for section 27 of HPA to apply.


    As I said in my earlier post, that is exactly what happened in shogun v hudson. Section 27 of the HPA is not absolute - the general rule in law is the nemo dat (quod non habet) rule and section 27 of the HPA is an exception to that rule rather than a rule itself - which is why its restrictively applied and dependant on a lot of technicalities.
    Money doesn't solve poverty.....it creates it.
    • Agricolae
    • By Agricolae 10th Mar 17, 12:43 AM
    • 362 Posts
    • 189 Thanks
    Agricolae
    Hello - just so that you are aware, "conversion" is civil law only. The criminal law equivalent of conversion is theft.

    Of course it is possible for a person to commit criminal theft and civil conversion at the same time.
    Originally posted by steampowered
    You're quite right - it seems I'm living in the early 20th century.
    • cookie365
    • By cookie365 10th Mar 17, 8:11 PM
    • 1,700 Posts
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    cookie365
    How have courts which are able to set a precedent defined 'good faith' in these circumstances?
    • AshTheLegend
    • By AshTheLegend 20th Mar 17, 9:50 PM
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    AshTheLegend
    Just thought I'd give you guys a quick update.

    It's now been two weeks since I called the finance company.

    I called them back today to see what's happening with it. Again, they've stressed that nobody will attempt to repossess the car and that I am free to do what I like with the car. I've asked for this in writing to which they've sent a letter out which should be with me later this week.

    However, they've said that they will not be removing the interest they have in the vehicle off from the HPI report. So the vehicle still comes up as outstanding finance. They've said that they're trying to get in touch with the original customer. They've told me that this "investigation" could take upto three months and should they still not be able to contact the customer, the finance marker will be removed. I'm waiting to see what this letter says and how they've worded it, and will then make my next move.

    I want the marker removed straight away and have quoted the Hire Purchase Act to them, and they've responded with the 3 months investigation !!!!!!!!.

    From my point of view, investigation or no investigation, I still have good title to the car.

    What do you guys think?
    • wealdroam
    • By wealdroam 20th Mar 17, 10:17 PM
    • 18,199 Posts
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    wealdroam
    Just thought I'd give you guys a quick update.

    It's now been two weeks since I called the finance company.

    I called them back today to see what's happening with it. Again, they've stressed that nobody will attempt to repossess the car and that I am free to do what I like with the car. I've asked for this in writing to which they've sent a letter out which should be with me later this week.

    However, they've said that they will not be removing the interest they have in the vehicle off from the HPI report. So the vehicle still comes up as outstanding finance. They've said that they're trying to get in touch with the original customer. They've told me that this "investigation" could take upto three months and should they still not be able to contact the customer, the finance marker will be removed. I'm waiting to see what this letter says and how they've worded it, and will then make my next move.

    I want the marker removed straight away and have quoted the Hire Purchase Act to them, and they've responded with the 3 months investigation !!!!!!!!.

    From my point of view, investigation or no investigation, I still have good title to the car.

    What do you guys think?
    Originally posted by AshTheLegend
    I think you just need to wait for their investigation to complete.

    They say they will remove the marker in three months at the latest, so if you don't want to sell the car in that time, there is no problem.

    If you do want to sell the car before the marker is removed, that also shouldn't be a problem because you will have a letter from the finance co explaining things.

    I really don't see a problem here.
    • Agricolae
    • By Agricolae 20th Mar 17, 11:53 PM
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    Agricolae
    So long as you're not looking to sell within the next few months I think all will be well.

    Letter or not, I think the marker may ward off many buyers who carry out an HPI check, before they even get in touch to clarify (some classifieds like AutoTrader include outstanding finance checks as part of their service). Not all potential buyers are going to trust a letter allegedly from the finance company - just as it seems the OP doesn't (and they know it's from the finance company).

    However I don't think there's much the OP can do except sit tight for the moment.
    • steampowered
    • By steampowered 21st Mar 17, 10:07 AM
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    steampowered
    Good news that the finance company aren't trying to repossess the car.

    It sounds like you do have good title. Although I'm not sure the finance company can be legally required to remove the car from the HPI register. So you might just have to hope they play ball and remove the HPI after their investigation.
    • Marktheshark
    • By Marktheshark 21st Mar 17, 10:26 AM
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    Marktheshark
    At present they will want you to "retain" the car, that is because they know where it is.
    This protects their holding in the asset.
    They will investigate the information you donated and if the seller declared the car to be HPI and finance clear then the 2006 fraud act section 3 kicks in over riding the civil law.

    You wont hear anything until they have established if the seller has any assets they can sell by serving statutory demand to recover the loss.

    Personally I would seek some paid for legal advice here.
    Brexit will become whatever they invent it to be.
    • Country Cousin
    • By Country Cousin 21st Mar 17, 10:40 AM
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    Country Cousin
    Sorry if this has been posted previously but do you know where the seller lives. Did you go to his house to view?
    • shaun from Africa
    • By shaun from Africa 21st Mar 17, 11:10 AM
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    shaun from Africa
    Personally I would seek some paid for legal advice here.
    Originally posted by Marktheshark
    Why spend money at this point?
    The finance company have stated on the phone that the OP is free to do what they wish with the car and that no one is going to attempt to take possession of it and they are sending out written confirmation of this.

    IMO, paying for legal advice at this time will just be a waste of time and money.
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