Purchased a car, Moneybarn threatening to repossess due to previous owner's outstanding finance

what707

My partner and I bought a used car about a month ago in a private sale off of Gumtree. Today, we got a letter from Moneybarn saying they own the car because someone has outstanding financing on it.

I've been reading other threads on here about this situation, and while we have all of the evidence of this being a good faith sale (ad on Gumtree, record of negotiations via SMS, record of bank transfer for payment), the log book shows that the previous owner that we bought it from only had possession of the car since June. This makes me think that he got a letter like this and immediately resold the car to us.

All of the other threads about this topic mention section 27 of the Hire Purchase Act 1964. My concern is that it appears that we may have not been the first innocent purchaser -- this car has had four previous owners before us, and we don't know which of them are the one with the financing agreement.

My question is, does section 27 of the Hire Purchase Act 1964 apply in this case if it was one of the prior owners rather than the most recent one who defaulted on their finance? And what should our next steps be?

I am assembling all of the evidence and paperwork regarding the sale, but Moneybarn has sent an extensive questionnaire and says that they will repossess the car if they do not have a response in 7 days. Some of the questions seem tricky, like one that says "How and when did you 1st become aware that Moneybarn owned the vehicle?" As far as I know, they don't own the vehicle and I'm afraid if we fill this form out and send it back to them, we may inadvertently harm our own case.

Any suggestions appreciated, and yes, I now know to check HPI before buying a car.

boliston

is the o/s finance less than the value of the car? if it is then probably best to settle it rather than hand the car back

what707

They haven't told us how much is owed, but I am not sure if we are legally obligated to "hand it back" because we bought the car in good faith at fair market value.

Fosterdog

Did you run an HPI check before buying?

macman

The OP has already stated that he didn't HPI it.
OP, you say it has o/s finance on it, how do you make the jump to that finance being HP? Does the letter from Moneybarn confirm that? It could be other types of finance secured against the car.
As long as one of the previous owners acquired good title (though the vehicle had o/s finance), it follows logically that anyone they sold it on to also acquires good title. Unless of course a subsequent owner also took finance on it which remains o/s.
You are not obliged to complete any paperwork sent to you by MB: I would write to them explaining that you purchased the vehicle from x in good faith, as a private buyer, and were not made aware that it had any o/s finance on it. Quote the relevant section of the HP Act.
It may well be a legal grey area, but you really have nothing to lose by trying this approach. I'm guessing that this was an old and low-value vehicle, so the finance co. simply may not consider it worth pursuing if you don't play ball.

Fosterdog

macman wrote: »

The OP has already stated that he didn't HPI it.

Sorry, I read it on my phone so I was a lot of text crammed onto a small screen, I missed the last sentence.

what707

I don't know what type of financing it was. The letter from Moneybarn says "We sold the vehicle to an individual under the terms of a finance agreement. The individual has not paid for the vehicle in full and therefore had no right to sell or relinquish possession of it to you or any other party. Please take note that we are the legal owner of the vehicle and seek its immediate return."

I will be honest that I do not know how the law treats situations like this, but I do not see how they are the legal owner of a car that we bought with my partner's name on the paperwork. It's a 2008 VW Golf that we bought for £3000, after having it looked at by a mechanic.

wesleyad

As you say it might be muddled somewhat by possession passing a few times, but at the end of the day someone will be protected by section 27, that person could be you, or one of the previous buyers (who would then pass the title to you).

I'd write to moneybarn stating you bought in good faith, at a price appropriate for the car (I assume it was), and as such are an innocent purchase. Quote the full act for them.

If they still kick up a fuss there are no win no fee lawyers that will take this on.

motorguy

boliston wrote: »

is the o/s finance less than the value of the car? if it is then probably best to settle it rather than hand the car back

Why on gods green earth would the O/P just roll over and effectively pay twice for the car? :eek:

motorguy

what707 wrote: »

I don't know what type of financing it was. The letter from Moneybarn says "We sold the vehicle to an individual under the terms of a finance agreement. The individual has not paid for the vehicle in full and therefore had no right to sell or relinquish possession of it to you or any other party. Please take note that we are the legal owner of the vehicle and seek its immediate return."

I will be honest that I do not know how the law treats situations like this, but I do not see how they are the legal owner of a car that we bought with my partner's name on the paperwork. It's a 2008 VW Golf that we bought for £3000, after having it looked at by a mechanic.

They ARE the legal owner as someone has previously taken out what sounds like a standard Hire Purchase agreement secured against the car.

BUT, you bought it in good faith, and have the documentation to support that.

I would be inclined to reply that you bought the car in good faith, enclosing copies of the ad, all communication and all paperwork / receipts and see what happens.

Might be worth getting formal legal advice around the wording and maybe even have a solicitor send the letter.

waamo

Some solicitors give a free half hour if you are on a low income. You can search here https://www.lawworks.org.uk/legal-advice-individuals/find-legal-advice-clinic-near-you