Hire Purchase massive confusion

evansc1

Hoping that someone can provide some much needed assistance. 

My friend has had his car (bought on hire purchase) for nearing on two years now, and has always been in a good financial position to not feel the need to check payments as simply assumed they always go out on time. 

He has just done a proper dive in to his finances as he is due to remortgage and has realised that the monthly car payments have never actually gone out this whole time! He just saved more, thinking he wasn’t spending as much on life. Now all of a sudden he is fretting about what may happen. 

No chasing has ever happened from the finance company or the garage it was bought from. He has a form that shows ‘credit application approved’ from the finance company but nothing shows on his credit report as to having any finance against his name or any missed payments. 

He is honest and also wants it sorted so that they don’t come knocking years down the line demanding full payment, but is now terrified that if he contacts them before the remortgage is approved, that it will really hinder his likelihood of being approved. 

Has anyone had any experience of something like this or know what the normal process would be when he contacts the finance company? Would they need to carry out a hard credit search? Demand the unpaid amount is paid right away? Reorganise the debt between them to work in both parties both interests? 

I have no clue and am helpless to assist him so any advice would be massively appreciated! 

[Deleted User]

If if he wants to increase his chances of being approved for the mortgage, he needs to contact them to make the missing payments ASAP.   He has the funds so can make up the arrears in full.

What do his credit files show in relation to the account?

evansc1

Deleted_User said:

If if he wants to increase his chances of being approved for the mortgage, he needs to contact them to make the missing payments ASAP.   He has the funds so can make up the arrears in full.

What do his credit files show in relation to the account?

Hi - nothing is on his credit files at all to even suggest there is any finance in his name with this company. It is like the debt does not even exist. 

There is only a mortgage showing in his name on the report and there are zero missed payments on the files and he has a near perfect score...

His big concern is if contacting the finance company now triggers a hard search which inevitably looks bad on the remortgage application. 

[Deleted User]

There's no reason for them to conduct a search. They've already advanced him the funds.  

The priority now is to get those funds back to them before a default or a CCJ turns up on his files. That really would look bad on a remortgage application.

He needs to be in control of the situation, not just hoping for the best. But do make sure he's checked all his files, not just one or two.

Ebe_Scrooge

evansc1 said:

Hi - nothing is on his credit files at all to even suggest there is any finance in his name with this company. It is like the debt does not even exist. 

There is only a mortgage showing in his name on the report and there are zero missed payments on the files and he has a near perfect score...

His big concern is if contacting the finance company now triggers a hard search which inevitably looks bad on the remortgage application. 

Have you has your friend checked all 3 CRAs?  Not all lenders report to all 3.  Aside from that, I suspect there's more to this than you're telling us.  There is no way you your friend has had a car for 2 years and not paid anything for it - or not noticed that payments weren't being taken.  On the offchance that there has been an administrative "male chicken"-up, your friend needs to contact the finance company and see what's up.  They won't do another search - that's already been done 2 years ago.  It'll be a case of coming to an amicable solution that both parties are happy with.

Edi81

I don’t believe this. 

The car dealer gets paid by the finance company so there is no way the dealer would be missing thousands of pounds without noticing it.  First point of call should be the car dealership that they bought the car from. 

SuperAllyB

Maybe bank details got put in wrong at some stage along the line and someone else who can afford not to check their bank accounts regularly has been making the payments 🤣

MrFrugalFever

Edi81 said:

I don’t believe this. 

The car dealer gets paid by the finance company so there is no way the dealer would be missing thousands of pounds without noticing it.  First point of call should be the car dealership that they bought the car from. 

Firstly, the car dealer doesn’t earn ‘thousands of pounds’ from car finance.

secondly, the only way that the finance would be live and show on your friends credit report is if he had legitimately viewed the SECCI, explanation document, use of information document and signed a sales agency agreement to that effect, alongside a direct debit mandate.
it is then the responsibility of the car dealership to upload these documents to the finance company and activate live funding once documents have been verified and processed.

this could be the reason why no DD’s have come out, but a very slim chance. Your friend would have had initial communication from the finance company at beginning of the agreement and an annual statement at least outlining the payments made.

i would also question now the legality of who owns the vehicle as a V5c isn’t proof of ownership just merely a registered keeper document. Definitely needs to be resolved ASAP as someone somewhere has been negligent and this could go sour.

misiek404

Call the finance company, ask for the account status/balance and all will be revealed 

Edi81

To clarify with HP the dealer is paid the advance directly by the HP company. To that end, there should be a discrepancy of thousands in their records if they have let the car go without receiving payment for it. 

User_101122

Has your “friend” done a hpi check on the vehicle ?