Outstanding car loan after death

Moby

My father recently died. Twelve months ago he bought a car and took out a five year loan from a finance company to pay for it. He didn't take out any extra insurance to cover repayments if he became ill etc. My parents have no savings and there is no estate to speak of. My mother did not sign the loan agreement, does not drive and is living on a state pension. Can anyone advise me as to what happens in these circumstances? My sister may be interested in taking over the car but not on the terms agreed by my father. He would have paid over 2.5K interest by the time the payments would have ended!

Common_Sense_2

Novation could happen, but only on the same terms. Other than that, the vehicle (which is still the property of the finance company) will be taken bak and sold at auction to pay off the loan. Any shortfall will be attempted to be taken from the estate (if there is any)

maginot

Your mother would not be liable for the loan, so do not need to worry about her money being taken. However if he has any estate that is left to the mother then the debt will be paid from this.
I also doubt the sister will be given the car by the company, unless she takes over full payments or possibly could pay it off in full now and save some interest.

chalkie99

Common_Sense_2 wrote: »

the vehicle (which is still the property of the finance company)

That isn't necessarily true.

The OP said :

he bought a car and took out a five year loan from a finance company to pay for it

There is nothing there to say the vehicle is tied to the finance agreement.

Moby - what sort of finance agreement is it? If it is actually a Hire Purchase agreement then it does indeed belong to the HP company and you should, probably, just contact them and explain the circumstances. It is unlikely though that your sister would just be able to take it over on better terms.

If it is a personal loan then the executors of the estate can sell the car for the best possible price and ask the loan company for a settlement figure. If the sale price does not cover the amount outstanding then the balance needs to be paid from any money left in the estate. If there is none then the debt cannot be paid and your mother is not liable for it.

So, first thing, what sort of finance was it?

Common_Sense_2

whoops - assumed it was HP!:doh:

Moby

It was a HP agreement....Barclays Finance.

lawrie28

The first thing you need to do is to inform Barclays.

Are you managing the estate? Because the first thing to get past is data protection, which may delay things.

I would ask for a settlement figure just to see what it is.

I would then try and find out how much the car is worth. If it is worth more than the balance left. If it is then the situation becomes much easier to sort as you just sell the car and add any remaining funds to the estate. Your sister could buy the car for the balance if everyone was happy with that.

If it isn't then you need to ask barclays how to proceed. More than likely the difference will need to come out of the estate.

I would also ask Barclays for a copy of the paperwork INCLUDING the Demands and Needs Insurance statement, which your Dad should have signed to say he did not want PPI on the finance. If they can't produce this, or it is not signed correctly, then you have a case that they should have offered your Dad PPI, and they should carry the loss on the loan. If not, then as above the difference will need to come out of the estate.

SOmone probably knows more about this than I on here, but i HTH in the meantime.

nelly12

Moby wrote: »

It was a HP agreement....Barclays Finance.

Barclays do not at this time provide HP agreements. It is a personal loan agreemnt so is not secured against the vehicle. 100% on this. Work in the industry.

lawrie28

nelly12 wrote: »

Barclays do not at this time provide HP agreements. It is a personal loan agreemnt so is not secured against the vehicle. 100% on this. Work in the industry.

But they did a year ago, 100% on this. Work in the industry.

cardiffgrad1

I used to work for Barclays Partner Finance..and the majority of car loans they do now and have done in the past year will be unsecured personal loans.

BPF will ask for all the financial details of the OP's late father and a decision will be made in due course, depending on the circumstances.

I spoke to someone about this when I worked there - they said that it's surprising how many people say, "my dad/mum's died..there's no estate.." and then it turns out that there is some sort of estate.

HappyMJ

The car is now part of the estate and so is the debt. The car would have to be sold to pay the debts of the estate. You can send it to auction and bid on it yourself if you really want to keep it. The money the car raises at auction will be used to pay the auction fees and the debt then the loan will be written off if the estate really has no other assets to pay any more.