Car still on finance : contract void?

Sawyer815

Hi,

I have viewed a used car (trade sale, not a private one) on Friday afternoon. I really liked it, so I left a £500 deposit, signed a deposit slip stating that it would not be refundable should I choose to withdraw.
When I went back home, I was told I had been stupid and careless and I really should have done a HPI check beforehand. So I did one. The car appeared as having an outstanding finance on it. I called the finance company, who confirmed that, in their files, the car still belongs to them.
The seller tells me he paid it off very recently but it takes time to be updated into their system.

My question is : am I right to believe this voids the contract and should entitle me to get my deposit back? I have not been disclosed very important information, the seller was selling a car which officially did not belong to him at that point. Am I in my right to ask for a refund here?

Thank you for your help,

forgotmyname

Lots of trade sellers have the vehicles on the forecourt on finance.

motorguy

Sawyer815 wrote: »

Hi,

I have viewed a used car (trade sale, not a private one) on Friday afternoon. I really liked it, so I left a £500 deposit, signed a deposit slip stating that it would not be refundable should I choose to withdraw.
When I went back home, I was told I had been stupid and careless and I really should have done a HPI check beforehand. So I did one. The car appeared as having an outstanding finance on it. I called the finance company, who confirmed that, in their files, the car still belongs to them.
The seller tells me he paid it off very recently but it takes time to be updated into their system.

My question is : am I right to believe this voids the contract and should entitle me to get my deposit back? I have not been disclosed very important information, the seller was selling a car which officially did not belong to him at that point. Am I in my right to ask for a refund here?

Thank you for your help,

If the finance company are saying that there is finance still outstanding, then i'd be pressing the trader for evidence they cleared it. If hes a small time trader he might be hoping to clear the finance when he sells the car.

If i were you i'd be expecting evidence the finance has been cleared before you pickup the car - an email direct from the finance company would suffice (and they will do it).

If hes not prepared to do that, then i'd be asking for a full refund of the deposit.

Ironically, if you had no checked and there was outstanding finance, then its the dealers problem and you have no liability. Now that you know, if you buy it and he doesnt clear it, then the finance company can repossess the car from YOU, even though you've paid the dealer in full.

Sawyer815

motorguy wrote: »

If the finance company are saying that there is finance still outstanding, then i'd be pressing the trader for evidence they cleared it. If hes a small time trader he might be hoping to clear the finance when he sells the car.

If i were you i'd be expecting evidence the finance has been cleared before you pickup the car - an email direct from the finance company would suffice (and they will do it).

If hes not prepared to do that, then i'd be asking for a full refund of the deposit.

Ironically, if you had no checked and there was outstanding finance, then its the dealers problem and you have no liability. Now that you know, if you buy it and he doesnt clear it, then the finance company can repossess the car from YOU, even though you've paid the dealer in full.

The dealer says he cleared it very shortly before putting it on sale, and that is why it hasn't been updated in the finance company files yet. But when I signed the deposit I did not know about this, I questioned him when I saw the HPI check.
He then told me that when I'd come to pick up the car, he'd have a letter of clearance.
But this, plus other elements : mileage discrepancy on the HPI check, car sold without a V5c (I was informed of that, but didn't quite realized how important it was, being freshly arrived into the country), made me lose all my trust in this car and this man. So I will not buy this car anymore.

My question is : does the fact that, according to them, the car still belonged to the finance company at the moment of the deposit make the contract void? Am I legally in my right to ask for my deposit back or not?

molerat

Sawyer815 wrote: »

My question is : does the fact that, according to them, the car still belonged to the finance company at the moment of the deposit make the contract void? Am I legally in my right to ask for my deposit back or not?

No you are not. If he tries to hand over the car without clear title then that is a different matter. The mileage discrepancy and lack of V5 are the things that would concern me though.

Sawyer815

molerat wrote: »

No you are not. If he tries to hand over the car without clear title then that is a different matter. The mileage discrepancy and lack of V5 are the things that would concern me though.

They concern me as well, this is why I do not want to buy this car anymore.
I just thought that, considering the car wasn't his and I wasn't aware of it, he had no legal right to sell it, hence the contract was invalid. Guess I will not see my deposit again then...

molerat

There can be many reasons why a car has finance on it - how do you think the little car dealer can have maybe up to £0.25M of stock, did you think the bank would loan him that much money without making sure they could get it back.

You need to discuss the reasons for no V5 and the mileage discrepancy, HPI is not infallible and is often incorrect.

arcon5

You have no grounds to complain about the V5, you knew about it before committing to buying the car.

What is the mileague discrepency? I suspect something like when financed it was x mileague and has since been in daily use.

Just because there is finance on it doesn't mean he has no legal right to put it up for sale! There will be an agreement with the finance company that he can sell the car but must clear the finance at that point.

Whoever called you stupid for not HPIing is clearly clueless themselve as to how dealerships work, however small.

Collect the car as agreed and phone the finance company with the dealer to confirm the finance is clear and title can be transferred.

Then apply to DVLA for the V5. Ensuring you get proof of purchase and possibly even see proof the dealer owns the car.

motorguy

molerat wrote: »

There can be many reasons why a car has finance on it - how do you think the little car dealer can have maybe up to £0.25M of stock, did you think the bank would loan him that much money without making sure they could get it back.

You need to discuss the reasons for no V5 and the mileage discrepancy, HPI is not infallible and is often incorrect.

By what the finance company have told the O/P it suggests this was private finance not a dealer financing his stock.

It would be a fairly crap setup if it was stock finance but the finance company who organised it were telling people that the dealer couldnt sell the car, would it not?

forgotmyname

Cynical me smells a bit of buyers remorse.

If i traded a car in on finance what would be the average time for it to show as clear of finance with the company and then HPI?

I know it will be a bit of a mixed bag with some companies better than others but the traders on here or ex traders, whats the average?

motorguy

forgotmyname wrote: »

Cynical me smells a bit of buyers remorse.

If i traded a car in on finance what would be the average time for it to show as clear of finance with the company and then HPI?

I know it will be a bit of a mixed bag with some companies better than others but the traders on here or ex traders, whats the average?

The finance company systems i would have thought would at least show the payment being processed the same day as the payment was made. HPI could take several days or more.

I would say the O/P is right to be "spooked" by it all. It would certainly unsettle me, and i've walked away from a sale for less reasons.