Hpi Check

[peteyg]

A car I'm hoping to buy has registered as having outstanding finance on the HPI check. Jusat got an email from the owner who says he has a small amount of finance outstanding. Can someone with financial knowledge explain what I do next? I can't get in touch with the company who financed it until Monday and I'm due to drive to the otherside of the country to look at the car tomorrow (Sunday). Don't want it to be a wasted trip. The car itself seems perfect and alomost too good to be true, but I'm not sure of the implications of this finance issue other than if I buy the car it won't actually be mine - which would be unfortunate! Is it just a case of the guy paying off the left over amount? Obviously I'm not giving him any money until this is sorted but I REALLY want the car!

Never been in this situation before.

Can't stop thinking about it which is why I can't sleep and typing away at 5am.

TIA,

Pete

Edited May 19, 2007 by peteyg

[Jonathan]

As far as I know you'd contact his creditor and get the finance transfered to your details.

The issue is with UK law is that you can't sell something that doesn't belong, if the car has finance then the creditors technically own it.

If the seller wasn't forthright about finance (and you found it out via HPI) the alarm bells would ring for me.

If you bought it what could happen is the police could take the car off you, you'd lose all your paper and the car would go to the finance company.

Are you taking the finance on or paying the seller the extra to clear the debt ?

The 'too good to be true' thing is usually that - the bargain is so attractive people make mistakes so tread lightly imo - you done the right thing with the HPI, hope it works out for you anyways....anything interesting car wise ?

[peteyg]

Thanks Jonathon.

I'd expect the seller to pay off what he owes! Why would anyone want to take on someone elses finance, surely it's not my problem?

It's a sensible everyday car, an Alfa 147 GTA!

I'll be treading very lightly...

Pete

[mayevora]

Pete. Had similar quite a few years ago when I bought an Escort. After a bit of negotation I arranged to still buy the car and paid the agreed amount less the outstanding finance (which wasn't that much - I think about

[ajax317]

I don't think it's as drastic as losing the whole car. I always thought that if there was outstanding finance the creditor had a right to receive only the amount outstanding. E.g. if a car is worth

Edited May 19, 2007 by ajax317

[Jonathan]

Depends, might be part of the deal / conditions of sale ?

Seen it before when people sell something minus the cost of the remaining Hire purchase, transfer the debt across and everyone's even.

I'm 99% sure the car cannot be legally sold until the debt is clear, as I say technically he doesn't own it.

If the seller didn't offer the information on the fact it had finance before you HPI'd it I would be very wary of the guy's integrity.

Doesn't mean it's not genuine though, just make sure you're backed up.

I would get the creditor's details and check with them, perhaps get it in writing or fax it to you - they will know for sure, and will be able to advise you.

Is there also not a help line for HPI ? They must deal with this day in day out.

[ajax317]

Depends, might be part of the deal / conditions of sale ?

Seen it before when people sell something minus the cost of the remaining Hire purchase, transfer the debt across and everyone's even.

I'm 99% sure the car cannot be legally sold until the debt is clear, as I say technically he doesn't own it.

It's my understanding that on a basic level the owner has legal title to the car and the right to sell it (if his name is on the V5), but the Finance Co. has a beneficial interest for the amount of finance outstanding. If the owner with legal title sells, save for certain conditions, the new owner takes subject to the beneficial interest and he owes the outstanding finance (EDIT: I'm basing this on the transfer of land, but could apply here too). What it then comes down to, as you say, is the wording of the contract as to whether the current owner can sell, so any legal action relating to that would be in contract between the selling owner and Finance Co. Thinking about it, this action could result in the new owner losing the car completely so it's probably more important to check out the terms than worry about the finance itself.

The joys of a law degree, I ought to add that these are only the amateur opinions of a struggling student and should not be relied upon, considered correct, your home will be repossessed etc. etc.

Edited May 19, 2007 by ajax317

[waynef]

Hi Pete

Good choice of car, really good runabout have one myself lol. (Pocket gokart)

Ok I have to say that having owned numerous vehicles on varying finance schemes that Jonathan is right. The finance company own the car until the final settlement figure has been settled. It is a legal binding contract.

On settlement the finance company will release the vehicle from the HPI register. However, I say however as there are normally clauses for example if two thirds (half in some cases) of the vehicle is paid off the finance company have to go through the courts to take the vehicle back, which has to be agreed by the court.

Technically the ownice is on the seller, and he or she should settle the finance or give you the finance agreement number for you to settle and pay the seller the difference. DO NOT settle the finance under any circumstance if the seller is not available as technically you've just settled their car.

Pete be careful as Jonathan has rightly said this should have been divulged at the ealiest stage of sale not through an HPI check.

You might see me hacking down the A3 later as just got my car back from having Cam towers re sealed.

Regards

Waynef

Edited May 19, 2007 by waynef

[russellbosier]

I bought a car a few years ago that had a large amount of finance owing. I simply got a bankers draft made payable to the finance comapny to cover that, and another for the remainder of the amount made out to the seller. I am sure a lot of people who take car finance need the money from selling the car to be able to pay it off, hence expecting them to pay it off before selling is a non starter, as was the case with the car I bought.

[peteyg]

Just had a call from the seller who seemed genuinely apologetic that he hadn't mentioned it as he planned on paying off the finance with the proceeds from the sale. He owes

[superdavelotus]

What normally happens is that you get a settlement figure from the finance, then either pay the finance company direct and give the seller the difference or write a banker's draft in the finance company's name and one to the seller for the difference. What ever you do, don't trust or rely on the seller to settle the finance by giving them the whole balance of the car. If it's genuine then leave a deposit and come back for the car. If this is not possible or feasible then walk away. You get what you pay for in this life so if it's really cheap then I would suspect something.

If you can't contact the finance company this weekend then technically he can't sell the car to someone else unless they are a complete muppet and hand over the total balance to the seller. In this case, they deserve all they get and it's better that it's someone else and not you potentially getting ripped off.

It's a buyer's market so don't rush into anything too quickly. I find that a rushed purchase always leaves me regretting later. Take time to think about it. If your meant to buy this car then things will fall into place.

I don't think the seller will be happy with that either. They have to assume that you will pay off the finance and they don't know you from adam. Have a banker's draft made out for

[andydclements]

Just had a call from the seller who seemed genuinely apologetic that he hadn't mentioned it as he planned on paying off the finance with the proceeds from the sale. He owes

[Backmarker]

Don't want to muddy the waters chaps but differences apply to whether you're buying off a dealer/trader and whether its HP or some other type of finance, ie personal loan.

Pete your posts suggests it's a private sale, so lets forget the dealer angle.

If its revealed on HPI then it will almost certainly be Hire Purchase rather than personal loan.

So, on that basis, ownership will remain with the finace company until the balance is cleared.

Your HPI search will have given you the name and tel number of the finace company. Even so, they will NOT give you a settlement figure. They can only give this to the borrower.

They will give a settlement figure in a letter for a set date (lets say 1st June) and then a daily interest figure thereafter.

Once you've seen their letter, you pay them the required amount to satisfy their interest and the balance to the registered keeper (you do this when you have the keys in your hand). Try and get receipts signed or transfer the monies electronically so that your bank has a record of the transactions.

Graham.

[peteyg]

Thanks Graham!

Just the info I needed.

Pete