outstanding finance on car

sherbiecat

We have just found out there is finance (chattel mortgage) outstanding against the car my son has just bought. The guy who sold it to him told us he had done a hpi check and it was clear. The log book was in his name and is now in my sons. The money is owed by the person who had the car before the guy we bought it from! My son is totally innocent in this and even has a signed receipt from the guy he bought it off. Where do we stand legally?

mountainofdebt

As far as I know if the HP repayments aren't being kept up on the vehicle then it still beongs to the finance company.

How did you find out - did you do a HP check after your son bought the car? How long did the previous owner have the car before he sold it to your son?

neilmcl

Was this a private purchase or dealer? Also, why would you not do your own HPI check instead of believing the word of a total stranger.

sherbiecat

A friend who is a dealer did a hpi check for us and yes it was after he bought it. Stupid I know but money is very tight and did not have the fee at the time. The car was everything he was looking for, he loves it! The guy we got it from bought it in June this year but has now got another one. We now think he is a dealer posing as a private seller. My husband phoned the finance company and was told there is a bailiff looking for the car. We are terrified it will be towed away before we can get this all sorted. We are even thinking of taking on the outstanding finance as it would be cheaper than losing the car.

ilovebanksMCMLXXXI

Hi

If there is outstanding finance on the car and the previous owner fails to keep up those payments/or clear the balance in full your son runs the risk of having the car taken from him by the finance company.

Although he is completely innocent the car would not legally be his as it was not the previous owners to sell.

No point crying over spilt milk and wondering why you didn't do your own HPi; what's done is done and that is where you 'legally' stand so I'd make every effort to make contact the last owner.

Best of luck

starrystarry

When a person sells an item to someone they pass on the same title (i.e. ownership rights) as they had to that item. So if the person didn't own the item outright, then neither does the second person (or any subsequent buyers). Fairness doesn't come into it unfortunately. So legally, you have the same title as the original "owner", which means the finance company can take the car back if needs be. The only right of redress would be against the person your son bought it from, who in turn would have a right of redress against the original "owner".

sherbiecat

thanks for the pointers

We will check with CAB

DVardysShadow

sherbiecat wrote: »

... The guy we got it from bought it in June this year but has now got another one. We now think he is a dealer posing as a private seller.

Or he might be a private seller who has realised about the HP.

sherbiecat

We have tried to contact the guy we bought the car from numerous times but he won't speak to us. He maintains he knew nothing about the finance an carried out 2 hpi checks. Although I have text him and asked for details of these checks he will not reply. I explained in the text that if they have shown up as clear we could be covered by their insurance but still no reply. I have spoken to the police and am going to CAB and trading standards tomorrow.

Optimist

Are you sure it is a Chattel Mortgage and if so you wouldn't be in Scotland would you ? I ask as chattel mortgages are not recognised in that far distant land.

As your starting with CAB and maybe even working up to a solicitor, point them in the direction of the 1964 Hire Purchase Act specifically section 27 (2)

sherbiecat

yes, unfortunately it states on our hpi check "chattel mortgage" and no we are not in Scotland. I find it so hard to belive that we are either going to end up losing the car abd therefore our money, or having to take on the outstanding finance. It makes my blood boil to think these people get away with it!