HP on Vehicle Question

Somerset

Not sure if this is the right place to post, if wrong please move.

This concerns a car on HP. My O/H wants to 'use' a vehicle, belonging to a (soon to be ex) business partner. The business partner is ceasing his own business at the end of the month and will have no need of this vehicle. It is on HP, and the agreement is in ex-partner's name. My O/H's expectation is that he 'takes on' the vehicle unofficially ie the current agreement stays with ex-partner, O/H makes the HP payments direct to the HP company, and gets ex-partner to sign some sort of agreement saying for £1 (as long as he makes the HP payments) he gets sole use of the vehicle and the right to transfer ownership to himself once all payments are made.

My concern is that if ex-partner decides later on to resurrect his business in one form or another, and asks for the vehicle back, my O/H is stuffed. I know the vehicle is owned by the HP company. I have doubts that the ex-partner can come to this type of arrangement legally. My O/H seems to think the £1 agreement will prevent this possibility.

I know all may go well and the 'unofficial' route may be fine. BUT if ex-partner decides he's changed his mind later - has my O/H any right to keep the vehicle or would this £1 agreement not be worth the paper it is written on ? For background the vehicle is worth about £1500 and probably another £3000 of payments to be made, but the vehicle suits the O/H (fairly specialised).

Hammyman

Don't do this. It is a complete and utter minefield. What if the ex-partner goes bankrupt? You lose the car as it was never yours.
If the ex-partner changes their mind there is absolutely nothing your O/H can do and the £1 agreement isn't worth a toss because the car belonged to the finance company until the last penny was paid so the ex-partner had no right to make the deal in the first place.

It is no different than if you buy a car privately and then it turns out to be on HP and gets repossessed...you lose the lot.

And if the vehicle is only worth £1500 and there's £3k of finance on it, what the hell is he buying it for, regardless of how its equipped?

Somerset

Thanks hammyman, you're just echoing my concerns. My O/H will have no 'rights' over the vehicle, regardless of this 'agreement' he's proposing.

As background, once this company closes at the end of the month, my O/H is unemployed. His idea was to try it 'on his own' ie self-employed. Without all the overheads (and various shenanigans), on-paper, he could make a living. To do this he needs an equipped vehicle. Without knowing for sure, that it's financially feasible, it would be madness to buy or acquire a vehicle himself on HP. So this option seemed 'manageable' ie no long-term commitment re vehicle cost, just the monthly HP installment (plus other operating costs) - and see how it goes. On-paper and reality are two different things. I suppose the worst case scenario, is that he goes down this route, tries it, makes a living, and the vehicle is repossessed, or they want it back - but at least at that point he'd know whether it's financially feasible and could look to buy or make other arrangements.

He'll read answers to this thread - if he goes in knowing the vehicle can be taken away at any point, at least he'll go in with his eyes open. He's currently convinced this £1 agreement will protect him. He can still give it a go, as long as he accepts he's got no protection whatsoever. Not ideal but times are tough.

LandyAndy

Can he simply rent the vehicle.

Somerset

LandyAndy wrote: »

Can he simply rent the vehicle.

Sort of what he's trying to do. He'll be paying a monthly fee, albeit a HP installment to a HP company, rather than the same sum to the ex-partner. So (to him) it's a monthly fixed cost. He won't pay it to the ex-partner as it might never reach the HP company ! The concern was the vehicle can be 'removed' at any time plus who has ownership at the end of the three years (or whatever's left). I think it's clear it can be 'taken back' at any point. And ownership stays with the ex-partner. The ex-partner might be honest then or not ? Would the £1 agreement hold any legal weight if this situation went the whole course ie three years on and all payments made ? Though the vehicle would probably be worth sod all by then. Just trying to work out the ramifications.

Inactive

Somerset wrote: »

Sort of what he's trying to do. He'll be paying a monthly fee, albeit a HP installment to a HP company, rather than the same sum to the ex-partner. So (to him) it's a monthly fixed cost. He won't pay it to the ex-partner as it might never reach the HP company ! The concern was the vehicle can be 'removed' at any time plus who has ownership at the end of the three years (or whatever's left). I think it's clear it can be 'taken back' at any point. And ownership stays with the ex-partner. The ex-partner might be honest then or not ? Would the £1 agreement hold any legal weight if this situation went the whole course ie three years on and all payments made ? Though the vehicle would probably be worth sod all by then. Just trying to work out the ramifications.

No, not worth the paper it is written on.

Your OH really needs to find a better solution to this.

Somerset

Inactive wrote: »

No, not worth the paper it is written on.

Your OH really needs to find a better solution to this.

Vehicle-wise, there are no other options. Normally, you'd buy or finance a vehicle yourself -but money-wise he's not in a position to do either. Plus he doesn't even know if the self-employed route is financially viable yet. Thinks so, hence trying this route, but doesn't know for sure.

Thanks for everyone's input btw.

LandyAndy

Somerset wrote: »

Vehicle-wise, there are no other options. Normally, you'd buy or finance a vehicle yourself -but money-wise he's not in a position to do either. Plus he doesn't even know if the self-employed route is financially viable yet. Thinks so, hence trying this route, but doesn't know for sure.


Thanks for everyone's input btw.

That's what I meant. Simply rent the existing vehicle for a few months. It won't take too long to decide if the work is viable in the long run. If it is then he will be in a position to seek a lease on a new(er) vehicle if/when the owner of the current one wants it back. Unfortunately the prospect of the owner wanting the vehicle back is just a commercial risk he'll have to take. Being self employed is full of such risks.

Inactive

But who is he going to " rent " the vehicle from?

The HP company will not rent it him.

His present business partner doesn't own the vehicle, so legally he cannot rent it out to anyone.

This is a minefield.;)

LandyAndy

Inactive wrote: »

But who is he going to " rent " the vehicle from?

The HP company will not rent it him.

His present business partner doesn't own the vehicle, so legally he cannot rent it out to anyone.

This is a minefield.;)

Maybe....but...

this appears to be a specialist vehicle which he could pay the owner a certain amount for the use of it on a monthly or weekly basis (Subject to obtaining the appropriate insurance).

As long as it is properly insured the finance house won't care who is using it.

frothey

yes they will, if they find out. normally the first thing they ask is whether the main user is the owner and registered keeper of the car.