Bought a car without knowing it was under finance

KellyAC

Just looking for some advice or to see if anyone else has been in the same situation and what the outcome for them was. We bought a car from a private seller 9 months ago and did what we thought was an HPI check; turns out it didn't show outstanding finance and so we had no idea the car is still under finance until now.

The car has been giving us a lot of trouble and too much for us to fix so we went to a dealership to see if we could find another one and possibly trade this one in. The dealership did the HPI check and informed us that the car has outstanding finance on it. We went straight home and phoned the finance company and the only information they would give to us is that they 'can confirm they have an interest in the vehicle'. We explained that we had no idea that the car was under finance until now and have copies of what we thought was the HPI check as proof. They said they would send out a questionnaire for us to complete with as much information to prove we had no idea and then they would make a decision as to whether to remove their interest in the car.

In the meantime I managed to contact the person we bought the car from 9 months ago who was very unhelpful and said that he didn't know about the finance, the finance was not his, and he had apparently done a car swap with someone else a month before selling the car to us and basically that he wasn't willing to help any further - not even to give the information of the person he did the car swap with and claims that he had no idea that the car was under finance either. He told me to go sort it out with the finance company. He basically didn't want to know anything.

It's been 2 weeks and we haven't had anything from the finance company so we phoned them again this morning and turns out they haven't yet sent out the paperwork but said that they would get the team dealing with it to look into it on Monday.

I presume whoever has the finance is still paying it because no one has come for the car but the problem is that the car is giving us trouble, it's too much to fix and there is nothing we can do while it still has outstanding finance.

Has anyone been in a similar situation? What did you do, and what was the outcome?

EdGasketTheSecond

I am afraid that in these situations it is the current owner that loses out though you might be able to sue the person you bought it from as they had no right to sell it not being the owner (who is the finance company).
How much is it worth roughly?
If you did a genuine HPI check at the time of purchase and met all their criteria (quite difficult), you might be able to claim from HPI but if it was a cheaper version then you won't.
Sounds to me like the seller knew the story and got rid of it quickly whatever he says. Why else get rid of it after only one month?
The good news is , I guess, that the finance company aren't being very proactive in trying to recover it so maybe the finance is small or the residual value of the car is small and not worth them pursuing.


Your options are:
1) Claim off HPI check if it was genuine and you met all criteria
2) Sue the seller as they did not have the right to sell the car
3) Wait for the finance company to make a decision


You may have to wait for 3) anyway before deciding on 1) or 2). If they cancel their interest then all well and good; you can sell it.

KellyAC

Thank you for your response. We bought the car privately 9 months ago for £3000 and if we had been able to trade it in, they would have given us £1600 for it. Looking back I don't think it would have been a genuine HPI check, as we thought at the time.

I also have my suspicions that the seller knew all about the finance etc because it is suspicious that he only had it for a month before selling it, or that maybe he knew the person he got the car from and is protecting that individual by not giving us any information.

The only thing we know about the finance is that it is due to end next year August but the finance company wouldn't even tell us that (that came up on the HPI check at the dealership) and we have no way of knowing who the person is who has the finance or of trying to contact them.

I guess we'll have to wait for the finance company to send us the questionnaires and go from there...

waamo

Take a read of this https://www.whatcar.com/advice/buying/what-happens-if-i-buy-a-car-with-outstanding-finance/n18536

EdGasketTheSecond

I don't think that advice is correct. If there is finance then the finance company own it; end of. It makes no difference whether the buyer did genuinely not know or not, the finance company still have the right to drive, tow or trailer it away with or without the current 'owner's' permission. Seems like WhatCar don't know the law which unfortunately does not favour the current 'owner'.


There were plans to change the law back in 2017 but the gov't decided not to proceed and hence if you buy a car with outstanding finance or a log-book loan, you run the risk of losing the car or having to agree a sum with the finance company to keep it.


OP, don't worry about trying to find out who the person is who owe's the finance; your claim would be against the person you bought it from. In turn they could sue the person they got it from. There is no guarantee you would win but if the finance company want to repossess the car or make you pay the finance, then the only recourse is to sue the seller for your losses assuming you know their name, address, and have evidence of the sale.

waamo

The Citizens Advice seem to think you have good title too. This is assuming it's Hire Purchase though https://www.citizensadvice.org.uk/consumer/buying-or-repairing-a-car/the-car-you-bought-is-still-on-hire-purchase/

oddjobbpb

Google 'innocent purchaser car on finance'

The OP will get good title to the car eventually, that's why the HP company are sending out enquiry forms.

Provided that:

The OP really is an innocent purchaser and had no prior knowledge of the finance
Paid a sensible market value for the car
It's proper HP and not a log book loan

I agree, it does seem counter intuitive EdGasket, in that you would think that someone who does not have title to something cannot possibly pass title on to another party.

But when it's a car on HP they can, it's the law, been there, done that.

EdGasketTheSecond

waamo wrote: »

The Citizens Advice seem to think you have good title too. This is assuming it's Hire Purchase though https://www.citizensadvice.org.uk/consumer/buying-or-repairing-a-car/the-car-you-bought-is-still-on-hire-purchase/

From that link:


"If you bought from a private seller, tell them "I have a right to a refund under the Sale of Goods Act 1979, because you didn't have the right to sell me the car".


Later it says you might have to sue them; like I said.

Ms_Chocaholic

Won't the previous owners details be on the V5

Ms_Chocaholic

Can you do a HPI check to find out how much is owing? That might give you a bit of peace of mind, ie there may not be much left owing

EdGasketTheSecond

oddjobbpb wrote: »

But when it's a car on HP they can, it's the law, been there, done that.

Who said anything about HP? The OP just says there is 'finance' on it. How is it that finance companies can just turn up and seize the car then if what you suggest is true? Google that; there are many examples of cars being 'lifted' by finance companies; one woman was even blocked by the tow truck while on the school run and they took her car off her.