Urgent help needed - purchasing a caravan with outstanding finance on it

paul112

Hi, we are buying a 2nd hand caravan. The sellers have told us there is outstanding finance on it. They can only settle the finance by using the money from the sale of the caravan.

We went to view the caravan today and they have said they will speak to the finance company to see where we all stand with this and how do we go about this so that we are not buying a caravan with outstanding finance on it.

We have no reason to doubt the sellers but you never know. We have left a small deposit with them because we really want the caravan so I could do with any replies asap please.

Thanks

Optimist

paul112 wrote: »

Hi, we are buying a 2nd hand caravan. The sellers have told us there is outstanding finance on it. They can only settle the finance by using the money from the sale of the caravan.

We went to view the caravan today and they have said they will speak to the finance company to see where we all stand with this and how do we go about this so that we are not buying a caravan with outstanding finance on it.

We have no reason to doubt the sellers but you never know. We have left a small deposit with them because we really want the caravan so I could do with any replies asap please.

Thanks

Is it a HP agreement or a loan agreement ?

If the latter you have no worries as the debt remains with the vendor.

If the former then they have no right of title to sell until the HP is settled so you are depending on the honesty of the vendor.

If it is a HP agreement then I would suggest you get involved in the settlement of the debt with the HP company. i.e. you arrange to pay the HP company and any left over goes to the vendor.

paddyrg

I am pretty sure you'll find the caravan isn't theirs to sell whilst there is outstanding finance on it. Probably smart to walk away from this one, unless they take a loan from somewhere to pay off the finance, then you can buy it, and they can repay their loan...

paul112

Thanks for replies. Seller is ringing finance company tonight to find out how we go about this so that both sides are protected. Its all very well saying walk away but its something we want to buy and seller is trying to do everything above board.

There must be many times that people have cars/caravans on finance and their circumstances change in that they can no longer afford them so have to sell them. The sellers of this caravan have no money to pay off the finance so its catch 22.

Replies advising me to walk away are of no help to me, I need to know how we go about proceeding with this in the best possible way to avoid any problems.

mo786uk

If it has HP finance on it and you knew when you bought it then you couldfind the company that owns it comes and takes it back if the seller doesn't pay the finance off.

So all you can do is risk relying on their word.

If you were THAT desperate then I would sit down with them and watch the finance being paid off with it being confirmed directly and then get a written receipt off them.

paul112

OK, seller has just telephoned. She has got settlement figure from finance company and they are going to put this in writing to her. She will forward a copy of this to me.

I am going to get a bankers draft payable direct to the finance company so seller will not be able to pay this into their own a/c. We will give seller the bankers draft on saturday morning in exchange for the caravan.

(In the meantime I will do a check to see if this is the only finance outstanding on the caravan and that the figure owing is definitely the figure I am paying).

unholyangel

I wouldnt pay the seller any money either until I was 100% sure the finance had been completely cleared off.

Can they not give the finance company permission to speak to you? So you can speak to the finance company directly yourself?

Is the value they are asking close/at market value? What I mean by that is that you're not considering buying it in conditions you normally wouldnt because its a knock down price are you?

Perhaps ask if any solicitors in your area can give a free 15/30 min consultation and try and get a hold of the finance agreement prior so your solicitor can look it over.

paul112

unholyangel wrote: »

I wouldnt pay the seller any money either until I was 100% sure the finance had been completely cleared off.

Can they not give the finance company permission to speak to you? So you can speak to the finance company directly yourself?

Is the value they are asking close/at market value? What I mean by that is that you're not considering buying it in conditions you normally wouldnt because its a knock down price are you?

Perhaps ask if any solicitors in your area can give a free 15/30 min consultation and try and get a hold of the finance agreement prior so your solicitor can look it over.

Thanks for reply. Seller has rang me and suggested that when we go to collect the car on Saturday that I either pay the finance company over the phone from my a/c or alternatively give seller a bankers draft made payable directly to finance company and she will post it. Either way, it will be done whilst she is there and she will hand over the keys straight away as its paid. I can do a HPI check to make sure that the amount she says owing is actually correct and that there is no other finance on the car that she hasnt disclosed.

What do you think? does this sound ok?

arcon5

Not particularly appropriate to your situation, but relevant as far as buying a vehicle with finance against it is concerned - if you buy a vehicle without the knowledge that there is outstanding finance on it you actually have a level of protection under the Hire Purchase Act 1964 so the finance company can't necessarily come and take back the vehicle.

27 Protection of purchasers of motor vehicles.

(1) This section applies where a motor vehicle has been bailed or (in Scotland) hired under a hire-purchase agreement, or has been agreed to be sold under a conditional sale agreement, and, before the property in the vehicle has become vested in the debtor, he disposes of the vehicle to another person.

(2)Where the disposition referred to in subsection (1) above is to a private purchaser, and he is a purchaser of the motor vehicle in good faith without notice of the hire-purchase or conditional sale agreement (the “relevant agreement”) that disposition shall have effect as if the creditor’s title to the vehicle has been vested in the debtor immediately before that disposition.

Thanks for reply. Seller has rang me and suggested that when we go to collect the car on Saturday that I either pay the finance company over the phone from my a/c or alternatively give seller a bankers draft made payable directly to finance company and she will post it. Either way, it will be done whilst she is there and she will hand over the keys straight away as its paid. I can do a HPI check to make sure that the amount she says owing is actually correct and that there is no other finance on the car that she hasnt disclosed.

What do you think? does this sound ok?

Personally i'd go with the first option and pay them directly over the phone and have them confirm to you the payment will satisfy the entire debt.

mo786uk

Confirm with the HP people how much is owed, pay it off directly and get confirmation that the seller now owns the goods.

At the same time get the seller to sign a detailed receipt to hand ownership over to you.

paul112

Arcon, thanks. We have now agreed that I am going to collect the car on saturday and will ring the finance company to pay off the amount owing when I am there. In the meantime I will arrange HPI check just to make sure there is nothing else owing on it.