HELP! Purchased car without knowing it had outstanding finance on

CRYSTAL

We purchased our car a little over 12 months ago from a private dealer who lives locally. The dealer explained that he received this car, plus an additional amount of money in exchange for another car that the buyer wanted. We checked the cars history online and finance was not flagged.

The car was insured fine however after recently being involved in an accident and due to the damage the other driver caused, it could not be privately settled and had to claim through insurance.

The insurance company have written off the car and told us that we would receive payment within 5-7 working days. Now received a letter in the post from the insurance company stating that the settlement has been paid, and the money from this has gone straight to the finance house of the vehicle. WHAT ?! FINANCE HOUSE? BUT WE.... !!!

As this was via a private dealer, do we have any rights in regards to reclaiming this money back? The insurance company have stated that they have done their job and paid the owner of the vehicle where the money is owed which I understand. Having spoken with the finance company they have said they will pass all of the information to the recovery team who will be in contact within 7 days.

When completing the check as mentioned, there were no red flags although unfortunately I cannot prove this as we thought nothing of it at the time so didn’t keep a copy - first time car buyer (lesson learned).

I appreciate that the car is owned by the finance company but surely the individual who has taken out the finance is responsible for this? Innocent Purchaser rights? Should the finance company not be chasing the individual who has taken out finance? We’ve been told the finance was taken out on the car in 2015 and we purchased it in 2017. It’s now nearing the end of 2018 so that’s at least 12 months worth of missed payments. Had the car not have been written off what would have happened? The original owner would have still been chased? We actually planned on selling it shortly and therefore would have unintentionally lumbered somebody else with this problem.

Are we wrong for insisting that the finance company pursue the individual who had taken out the finance to recover the costs and give us our insurance pay out back? Understandably cars aren’t cheap and therefore we really need the insurance money to buy another.

Any advice on channels to take would be appreciated

neilmcl

I would wait and see what the finance co. comes back with. If you don't get anywhere then take it up with the dealer that sold you the car. By law they must have legal title to sell you the car.

CRYSTAL

Hi Neil,

Even if he’s just a local dealer who operates from his house? My concern is that he too was non the wiser about this.

Thanks

CRYSTAL

Hi Neil,

Even if he’s just a local dealer who operates from his house? My concern is that he too was non the wiser about this.

Thanks

waamo

What do you mean by "private dealer"? He is either a dealer or made a private sale. What is known as "driveway dealers" are often legitimate dealers who choose not to use a forecourt.

Did he try and masquerade as a private seller or did he advertise as a dealer?

bigisi

CRYSTAL wrote: »

Hi Neil,

Even if he’s just a local dealer who operates from his house? My concern is that he too was non the wiser about this.

Thanks

That's his problem, if he wants to play dealer then he has to play by the rules dealers do.

My guess is that he's selling buying and selling the odd car and pretending he's a private seller to try and avoid all the responsibilities which come with being a business/proper dealer.

CRYSTAL

Somebody who regularly buys and sells cars from his home. Advertised on gumtree / auto trader etc. Is it reasonable to request the money back from him? Totally clueless to how all of this works

motorguy

CRYSTAL wrote: »

Somebody who regularly buys and sells cars from his home. Advertised on gumtree / auto trader etc. Is it reasonable to request the money back from him? Totally clueless to how all of this works

Yes totally reasonable. If he wants to be a dealer then he needs to accept the responsibilities that come with it.

waamo

CRYSTAL wrote: »

Somebody who regularly buys and sells cars from his home. Advertised on gumtree / auto trader etc. Is it reasonable to request the money back from him? Totally clueless to how all of this works

Does he state he is a dealer though? Or does maintain it's a private sale? It isn't clear from what you are saying.

I'm asking as the answer may give an indication as to his honesty.

neilmcl

waamo wrote: »

Does he state he is a dealer though? Or does maintain it's a private sale? It isn't clear from what you are saying.

I'm asking as the answer may give an indication as to his honesty.

I think it was pretty clear from the OP's first paragraph.

A guy takes a car as part-exchange and then flogs it, sounds like a dealer to me.

waamo

neilmcl wrote: »

I think it was pretty clear from the OP's first paragraph.

A guy takes a car as part-exchange and then flogs it, sounds like a dealer to me.

It's the phrase "private dealer" that slightly makes me wonder. Clearly it's either a private sale or a dealer and can't be both.

Clearly he is a dealer, it's whether he is admitting being one that I want to know, hence my comment about judging his honesty.

My hunch is they mean a driveway dealer but I've found assuming things on this forum can lead you on a merry dance. It doesn't hurt just to be 100% clear.