Selling a car on finance

bankclaim · 20th October 2006, 20:59

Hi

I wounder if anyone could give me some legal advice on selling a car with outstanding finance.

A friend of mine obtained a car on finance @ about 44%apr. he now wants to get rid of the car and has been told by somebody that if he gets a signed declaration from the buyer that he(the buyer) will continue to pay the finance i.e assume respinsibility for all outstanding monies on the car, then my friend would be covered against the finance company. Therefore the finance company would not be able to take County Court proceeding or even record a default on my friends credit profile.

Is there anybody on here who is familiar with the legalities on this subject.

Please help

Thanks

Jimbo44 · 20th October 2006, 22:05

To the best of my knowledge selling goods which are the subject of a finance agreement (i.e. hire purchase) is against the law. Basically it's not the "hirer's" property to sell until all payments (including any "option to purchase fee") have been paid and written confirmation is received from the finance company that this has been done.

A "declaration" such as you suggest isn't, I think, worth the paper it's written on. If the "purchaser" defaults it's the original hirer the finance company will be chasing. I doubt any finance company would consent to the "transfer of lability" to an unknown (to them) third party. I would suspect that a contingency such as this will be covered in the agreement's "small print" too.

Jimbo44

jo5ephedward5 · 21st October 2006, 16:21

agree with the above - but you can usually sell it to someone if they pay the finance company what you agree for it - say there is 4K owing and car is worth 2K you can ask the finance co if you can sell it so long as funds go to them - you advertise it for 2K and sell it getting the buyer to pay the finance co directly and then you owe the reminder for soemthing you no longer have...i know of freinds who have done this but to me its worse to be paying for it and not having it!

steveoram1 · 1st November 2006, 23:36

Selling a vehicle on which HP is still owed is against the law. The way an HP agreement works is that the car dealer invoices the finance company for the car. The finance company then pays the dealer for the car and the customer hires the car from the finance company until the very end of the agreement. At this point the customer pays the finance company an 'option to purchase fee' which actually transfers ownership to the customer. It would be exactly the same as selling a rented t.v., house etc. i.e. it's not yours to sell in the first place. You wouldn't dream of selling a dvd you rented from blockbuster so why would you do it with an item worth 500 times as much. In my job I use experian car data checks every day and this can tell you whether a finance company has an interest in any car. There has however been a tendency in recent years for finance companies to sell personal loans rather than HP. In this case most of the rights given to the customer under the CCA 1974 are taken away - chiefly the right to voluntarily terminate the agreement upon paying half the total payable. Many people who have taken these loans have no idea they have a loan instead of HP as the forms they sign look very similar. If you have one of these loans you do have a right to sell the car and the finance company has no right to register an interest on experian/HPI. Many of them do register an interest but if they have you can have it removed.

jo5ephedward5 · 2nd November 2006, 10:10

Sorry to Hijack but I'd be interested on how to get them to remove it as Black Horse have done this to me and they wont reply to my letters asking them to remove it from teh HP register - any help would be great!

RichardJH · 14th November 2006, 15:42

Likewise - any information would be great!

Quote:

Originally Posted by jo5ephedward5

Sorry to Hijack but I'd be interested on how to get them to remove it as Black Horse have done this to me and they wont reply to my letters asking them to remove it from teh HP register - any help would be great!

meggyweggy · 15th November 2006, 20:22

I will take it that the agreement has now been paid off and you are wanting them to remove it so you can sell the car on. If they won't remove it i beleive the best way to do is contact the people that run the HP register requesting them to remove it.

Notty · 15th November 2006, 20:27

Would it matter if its been paid off? If it is a loan as you say and not HP then you can sell the car anyway if its been paid off or not? Is that correct?

meggyweggy · 15th November 2006, 20:35

Depends what type of laon it is as far as i am aware. If it is a secured car loan them i am sure they would be within there rights to add their interest.

RichardJH · 16th November 2006, 00:01

Thats the point - its not a secured loan, nor a HP agreement, so they shouldnt be able register their interest in it!

Quote:

Originally Posted by meggyweggy

Depends what type of laon it is as far as i am aware. If it is a secured car loan them i am sure they would be within there rights to add their interest.

meggyweggy · 16th November 2006, 00:03

Then i agree they can't add interest and as such i would speak to HPI to have it removed

RichardJH · 17th November 2006, 14:13

Have done so - and this is their reply:

I have spoken to one of our finance team and they have confirmed that Black Horse will not remove the financial interest against the vehicle, even if it is a personal loan. All we can recommend is that you get a letter from Black Horse confirming that the personal loan will not cause a problem with the sale of the vehicle.

I dont think this is an acceptable reponse and have replied reaffirming the fact that what they are doing is a misuse of the register - watch this space!

Quote:

Originally Posted by meggyweggy

Then i agree they can't add interest and as such i would speak to HPI to have it removed

meggyweggy · 17th November 2006, 17:24

I would agree with you if it is a personal loan then they have no right to register any interest in the car as they don't have it. I would recommend writing to Blackhorse requesting them to remove it

RichardJH · 20th November 2006, 03:30

The reply to the reply to the above email was as follows:

Dear Mr Hosgood

We are unable to comment further in reference to your email, we can only advise you contact the finance company as previously mentioned in the email.

Regards
Barbara

So a letter has been sent to Black Horse, it will be interesting to see the reponse!

Richard

Quote:

Originally Posted by meggyweggy

I would agree with you if it is a personal loan then they have no right to register any interest in the car as they don't have it. I would recommend writing to Blackhorse requesting them to remove it

Jimbo44 · 22nd November 2006, 13:08

Of course, if you really want to get the finance company to scratch their corporate head you could ask them under which statute they they alledge they have the authority to register the car!

I have a kind of hunch the answer, (if they give a direct one), could be interesting.

jo5ephedward5 · 22nd November 2006, 13:10

Quote:

Originally Posted by Jimbo44

Of course, if you really want to get the finance company to scratch their corporate head you could ask them under which statute they they alledge they have the authority to register the car!

I have a kind of hunch the answer, (if they give a direct one), could be interesting.

and what would your hunch be lol.

this is exactly the question i will be asking when i post them my next letter this weekend!

Jimbo44 · 22nd November 2006, 13:25

Quote:

Originally Posted by jo5ephedward5

and what would your hunch be lol.

this is exactly the question i will be asking when i post them my next letter this weekend!

My 'hunch'? I don't know of any legislation giving anyone the right to register their interest in unsecured goods. Secured goods, (as in subject to a Hire Purchase Agreement, Secured Loan, Mortgage etc.), maybe, but not unsecured (as in financed by a Personal Loan such as those used for car purchase).

I could well be wrong though!!! Anyone know for sure????

If you do ask the question though, I would love to see the answer, please.

RichardJH · 22nd November 2006, 13:39

This is a copy of the letter which has been sent by me and received by Black Horse (recorded delivery)

To Sir or Madam:

Agreement number – XXXXXXXXX
Vehicle Registration – XXXXXXX

After recently obtaining a HPI check for the above vehicle (copy attached) I am concerned as to why there is an outstanding finance file shown against it.

I brought this vehicle with a Black Horse personal loan agreement, which is confirmed at the top of the signed agreement (copy attached).

As this is not a Hire Purchase Agreement, I respectfully request that you remove the file held against it on the HPI register and provide me with an explanation in writing as to why a file was placed as such.

I have been advised that unless the finance agreement is Hire Purchase, or a "secured agreement", no file should be placed on the HPI register and to do so is a serious misuse of it.

The signed agreement cannot be both a Personal Loan Agreement and a Hire Purchase Agreement – please confirm in writing which you deem the contract to be. If you deem the contract to be a Hire Purchase Agreement, then I request documentation detailing it as such.

Unless I receive a satisfactory response from Black Horse Ltd, replying to my above requests and giving written confirmation of the removal of, or the intention to remove, the file on the HPI register, I will report the misuse to the Finance and Leasing Association and proceed to take further legal action.

I would request that this letter is replied to within the next 14 days.

So we'll await the reply!

Richard

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