Another car question

Sboot3

Hi all,

I asked a question on here about my car on hp and what would happen when I go BR.

Now I have a slightly different question after speaking to my Dad. Who does not know about the BR.

He has offered to pay off the hp approx £3k and then said I'd be free to sell the car myself, buy a more economical one for about £1k and give him the extra.

I think I know the answer, but can I do this before BR? I suspect the OR would want the money back?

My other option, and the one I prefer, having read the hp agreement is to end the agreement and give the car back as I have paid over 50%, my Dad buy me a cheap car for me to pay him back later. I mentioned this to him but his belief is that I agreed to pay the money to buy the car and that's what I should do.

Can anyone with experience of similar advise please?

Thank you!

dojoman

I think you have answered your question already. When you go BR you cannot give preference to ANY creditor and that is what you would be doing.

Ineedaname

I think either scenario would be considered preferring a creditor. Awaiting a knowledgeable response.

Oops, Dojoman beat me to it.

Sboot3

Thank you.

I thought it would be seen as giving preference to that creditor.

Ineedaname - please could you clarify how the 2nd option would still be seen as that? I think I've missed something, I'm still trying to get my head around it.

It would be to end the hp agreement, give the car back to the hp company, and my Dad buy me a cheap car. (I would pay him back but that would be when I have the cash - ie after BR so I would not class him as a creditor for in the BR)

Could that still land me in trouble?

dojoman

Your dad could buy the car and be the owner, the registered keeper does not have to be the owner. You then could pay him back when and if you can afford it.

Ineedaname

It's just a gut feeling because you are in effect clearing debt, albeit ending the HP within the rules of that agreement. So really you're still prefering that creditor by making arrangements that will wipe out what you still owe to them.

It seems to me to provide the same result as if you sold the car and paid the remainder of the HP off with the proceeds. You're still favouring one debt over another.

Does that make any sense?

dojoman

So are you saying they could not end the hp agreement?

Ineedaname

I don't know for sure Dojoman, it just seems to me it's still the same result, a creditor favoured by finding a way to clear the debt.

I'm hoping someone knows the definitive answer cos mine is just based on gut and logic, not knowledge.

I'm imagining the conversation with the OR too. "So you had another debt but it's gone now, how did you manage that?" type of thing...

dojoman

But an HP agreement is a sort of secured loan, the car does not belong to them until all payments are completed. Personally I don`t see a problem with it.

Ineedaname

I see what you're getting at, the same as if you sell a house just before BR and pay the remainder of the mortgage off, with all amounts somehow balancing to zero debit or credit from the sale?

So you're saying it's OK to give the car back and wipe the remaining HP out? That would be good news for the OP.

Sboot3

Thanks guys, it's good to see it's not just black and white I guess.

Dojoman - that's how I was thinking about it, I was going along the lines of it not being a debt the same as my credit cards as it's hp. I'm hiring the car, so if I end the agreement and hand the car back, the agreement says provided the car is in reasonable condition there will be no more to pay.

Like TV hire or similar.