Sold a car but it had finance.

wmguk

Hi all, 
my missus was bought a car by her mum, the V5 has always been on my missus name. The car was bought 2 years ago. My missus isn’t very close to her mum anymore. 

The engine blew up and so we managed to get hold of her mum who told us to just get rid of it, so we sold it to a business and the log book was put into a traders name. 

Several weeks after selling it he contacted us to say he has spent £2k on it, went to sell it and it showed up finance. Turns out my missus mum took out 4 year finance on it so 2 years left. She’s happy to keep paying it and even text us to say the finance company told her that she can sell it as long as she keeps paying the finance off each month. 

Now the new owner has told us he’s going to sue us for £2700 as that’s what he’s spent so far….

what’s the situation? We had no idea that finance was there and she told us to sell it.

iwb100

Oh. Dear. What type of finance deal is it that your MIL has on the car?

flashg67

The business clearly didn't do even the most basic of checks. Not sure on the legalities here - you are supposed to declare if asked, but did the buyer ask? What is the basis for his claim - presumably he got it cheap knowing it needed an engine / a heap of money spending on it. I'd say he can only claim the difference between a non-financed car needing an engine, and a car with finance that needs an engine - looking at the costs in the OP, this can only be a few £00, not £000s ?

iwb100

flashg67 said:

The business clearly didn't do even the most basic of checks. Not sure on the legalities here - you are supposed to declare if asked, but did the buyer ask? What is the basis for his claim - presumably he got it cheap knowing it needed an engine / a heap of money spending on it. I'd say he can only claim the difference between a non-financed car needing an engine, and a car with finance that needs an engine - looking at the costs in the OP, this can only be a few £00, not £000s ?

The fundamental issue is he’s not the legal owner.

Car_54

iwb100 said:

flashg67 said:

The business clearly didn't do even the most basic of checks. Not sure on the legalities here - you are supposed to declare if asked, but did the buyer ask? What is the basis for his claim - presumably he got it cheap knowing it needed an engine / a heap of money spending on it. I'd say he can only claim the difference between a non-financed car needing an engine, and a car with finance that needs an engine - looking at the costs in the OP, this can only be a few £00, not £000s ?

The fundamental issue is he’s not the legal owner.

And neither was the OP when he sold it.

iwb100

I’m a bit surprised he’s only asking for £2700 to be honest,

If this is a pcp then there is a big problem….

wmguk

It’s just standard hire purchase. 

We were given permission by the person who had the finance to sell the car - £600 as it needed an engine. We had no idea at all that she took finance to buy the car and she told us just to sell it so not sure who is liable. 

The finance in MIL name
log book in partner name
i advertised it and spoke to him etc about it so he says he will sue me personally for £2700 but I don’t think he can do that as he gave the cash to my o/h etc. 

im planning on waiting to see what the small claims comes through as because we sold it to his business so his business will need to sue me and provide proof of all the out of pocket expenses - he trades out of his back garden and I’d be interested to know if HMRC knows he buys and sells etc etc. 

although I just wanted to know roughly where I stood with regard to any claim he might have against me. 

iwb100

wmguk said:

It’s just standard hire purchase. 

We were given permission by the person who had the finance to sell the car - £600 as it needed an engine. We had no idea at all that she took finance to buy the car and she told us just to sell it so not sure who is liable. 

The finance in MIL name
log book in partner name
i advertised it and spoke to him etc about it so he says he will sue me personally for £2700 but I don’t think he can do that as he gave the cash to my o/h etc. 

im planning on waiting to see what the small claims comes through as because we sold it to his business so his business will need to sue me and provide proof of all the out of pocket expenses - he trades out of his back garden and I’d be interested to know if HMRC knows he buys and sells etc etc. 

although I just wanted to know roughly where I stood with regard to any claim he might have against me. 

I think his claim is valid and he absolutely has no choice but to claim.

He will absolutely be able to claim what he paid for the car. As for anything else, less likely but still, 

The finance company own the car. It wasn’t yours to sell. And it’s not his now. Yet you sold it to him. He has a claim. 

sheramber

wmguk said:

It’s just standard hire purchase. 

We were given permission by the person who had the finance to sell the car - £600 as it needed an engine. We had no idea at all that she took finance to buy the car and she told us just to sell it so not sure who is liable. 

The finance in MIL name
log book in partner name
i advertised it and spoke to him etc about it so he says he will sue me personally for £2700 but I don’t think he can do that as he gave the cash to my o/h etc. 

im planning on waiting to see what the small claims comes through as because we sold it to his business so his business will need to sue me and provide proof of all the out of pocket expenses - he trades out of his back garden and I’d be interested to know if HMRC knows he buys and sells etc etc. 

although I just wanted to know roughly where I stood with regard to any claim he might have against me. 

Add to that the HP company own the car.

Finance needs to cleared to allow a sale to go ahead- either the registered keeper pays it off or whoever is buying it clears ot from the money they  agree to pay for the car.

What proof does your MIL have that the HP company said she could sell it and  keep paying the finance? That is not normal.

The £2700 would appear to be the cost of replacing the engine plus the purchase price.

He should then return the car to you.

 

Herzlos

A trader bought a car, didn't ask if there was any finance and didn't do an HPI? That doesn't bode well, and could make it a bit messy. Legally, you weren't able to sell the car to him, but he should also have done some due diligence on the purchase. He'd more likely win in a claim but I'm not sure he'd be able to do more than get you to buy the car back for what he paid.

Your best option is probably to clear the finance so that he can own and sell the car. How much is outstanding? Can you get some alternative funding (like a bank loan) to clear it?

shiraz99

This has become very complicated. To start with you had no legal title to to put the car up for sale, you were the registered keeper only, not the owner. The owner of the car was the finance company and whilst it's true they may have given your MIL (their customer) permission to sell the car they would still expect the finance to be settled. The person you sold the car has every right to expect you and your MIL to get this sorted, although to be fair it doesn't sound like they did perform any due diligence when before going forward with the deal.

The best way to resolve this is for your missus and her mum to clear the finance asap.