whitenoise

I have been looking for a replacement car and something somewhat newer lately. Had a look around and found a nice example on eBay but the guy was honest and said there was some finance owed on it. I emailed him and he told me that basically he got stung, he purchased the car 3 years ago without HPi checking it and once he bought it he said he found a leaflet on it one day to get in touch with a lending company. Long story short he has put a private registration on it and had the alloys re-done in gloss black. He believes that after 3 years there will be no further interest in the car from the finance company and as it is on a private registration it will be hard for them to find the car if impossible if they so wanted to repossess it?

Obviously im now not interested in gambling 6k on a dodgy car and the guy has since removed the advert and his account doesn't exist any longer.. maybe he spooked himself?

Just wondered how hes got away with it for so many years? obviously the finance is not in his name, finance isnt registered against his address, plus it has a private plate.. so has he just been lucky or is it generally hard to track a car down that has money owed once its not sat outside the address the finance was taken out against, and has a private registration on?

St3V3_C

Change of plate will be recorded mate.

He sounds dodgy as fuck and very eager to shift it. Don't go anywhere near it.

D-Sport

Be as interested in this as a dose of aids

whitenoise

Yeah as said im definately not interested. I thought he was looking for a quick shift as it was a grand less than other examples same age/mileage. just couldnt work out why after 3 years he has suddenly decided to get rid of it? If he was that adamant he could get away with it then obviously he has doubts if hes not trying to flog it on.. obviously cant live with the paranoia much more !

STeve

iTrader: (11)

only a mug would deal with him its prob cloned or a ringer

Iain Mac

If he was an innocent private purchaser he has good title to the car, as will any subsequent innocent private purchaser.

The finance company can't take it off him, and another private buyer buying the car from him without knowing about the finance would also have good title, but I'd be interested to know if someone buying from him KNOWING there was finance would also get good title? The fact that they have told him about the finance suggests that they have a reason...

Iain Mac

Forgot to say - I still wouldn't buy it without written confirmation of no further interest from the lender AND a clean HPI in my own name, not the seller's - I'd want the protection (for what it is worth) of their guarantee.

D-Sport

Unfortunately this isn't the case and why hip charge for this info

If you buy a vehicle with finance owing on it you immediately take over the debt, I've seen cars repossessed in matters like this

Iain Mac

That my friend is horseshit. If the car was bought from a dealer it can be repo'd by the finance co and the buyer has to seek redress from the dealer but not for a private seller.

You cannot and never assume liability for anyone else's debt by buying an asset - quite apart from anything else, the lender may not judge you sufficiently creditworthy to assign the debt, and they have some say in who owes them the money they lent!

D-Sport

Keep taking those tablets

Why does hip charge for this info if it can't be held against people

D-Sport

The finance company own the asset until all monies owed on it are discharged and unless all payments are made in full and on time can repossess the vehicle at any time

Try selling your house privately for cash and your telling me the new owner is going to be able to tell the bank to go get fucked?

Iain Mac

OK, I'll give you my 30 years experience in motor and asset finance and bow to your greater knowledge.

HPI originally only sold info to the trade who, as I've said, don't have the same protection as consumers.

More recently, like everyone else, they wanted more money so started selling info to the public.

If you buy a HPI and it reveals finance you aren't an innocent buyer anymore and I'd like to know the position if you find out either from HPI or the seller. My more recent experience is all in business to business financing - I got fed up dealing with consumer experts some time around 1992.

Iain Mac

Those posts crossed over. Your mortgage analogy is wrong because they are two different types of lending secured by different means. You really need to know what you are talking about before you get started.

D-Sport

So your saying if I buy a car with outstanding finance and I don't do a hip and the seller doesn't advise me of the outstanding finance I'm totally in the clear?

Iain Mac

I'm saying that provided you have no knowledge of the outstanding finance you are an innocent purchaser and will have good title to the car.

That is different from being in the clear because A) the trade won't touch the car when you want rid (because the lender retains an interest in the vehicle)

B) The lender can't repo it but they don't have to take the flag off, so any private buyer will be cautious.

C) Unless the car is a rare one, why would you want the grief?

https://www.autocheck.co.uk/Outstand...=420&width=610

http://www.adviceguide.org.uk/wales/...e_purchase.htm

D-Sport

So why aren't people selling their mates their cars with finance on em and everybody walking away Scott free

Iain Mac

FFS I give up. You obviously know more than me and I surrender.

Because they wouldn't be innocent purchasers. If the lender suspects collusion the "seller" and the "buyer" can end up in court.

And, by the way, the finance co can't repo from their customer at any time either. There are rules that have to be followed or they will end up in more trouble than the defaulter.

You can do your own research on the rules for that because I've passed on enough of my knowledge.

D-Sport

No matter what you say to me I'm not at all convinced what your saying is true and correct

When I take finance out on a car the finance company or bank owns the car and retains the right to repossess if I fail in my duty to pay my fees

If I sell this vehicle toy mate and I stop paying then my mate is up the creek because the finance house will come looking for the car and will repossess it to sell it at auction to recoup their outstanding fees, my mate would then have to sue me for what he paid me.

If any of this is untrue why aren't people taking out finance for say 5 cars, then selling them and pocketing a huge sum of money and the 5 people who bought them wont have them repossessed?

Your trying to tell me the banks are that soft?

Why do car sales businesses when getting a car in from a trade in pay off the finance house instantly

D-Sport

You are giving up because you are totally wrong mate, there are terms on the contract signed when u buy finance for your car through hire purchase or fixes term lease, naturally they have to abide by rules before repo but the thing we are discussing here is the innocent party buying a financed car is caught because his contract is between him and the seller and the original contract is between finance house and the original owner

It's up to the second guy to sue the first guy as this is a civil case but the legal case for repossession is between the original guy and bank and the car remains an asset of that bank and even remains in their set of accounts for the revenue in their profit and loss etc

Iain Mac

This crossed again but go read the links and do your own research.

If you are a private seller and an innocent buyer comes along he has no need to fear repossession, but he may have to satisfy the lender that he IS an innocent buyer and that can take time because the banks and finance companies have whole departments dedicated to minimising and prosecuting fraud.

I've already told you why the trade insist that finance is settled: because they DON'T have the same protection so if they buy the car in to stock or take it as a px the finance company can come and lift it from the forecourt and leave the innocent dealer to recover their cash from the seller because the courts have deemed the trader to be experts.

Now, I'm calling troll at this point.

Iain Mac

Here you go a .gov website that describes exactly the situation you propose.

http://www.warwickshire.gov.uk/corpo...256DE2005F50CD


Tomorrow, I'll contact the Finance & Leasing Association who issued my professional qualifications and let them know that we got it all wrong and to consult you for the correct legislation.

D-Sport

You do that and also tell them that I live in Ireland and you live in the uk and that you after your 30 years of experience are talking complete cock

D-Sport

If you read this out in court as a defence for being innocent the judge would ask you what steps you took to ensure there was no outstanding finance on the car, with hip and others

D-Sport

If you read this out in court as a defence for being innocent the judge would ask you what steps you took to ensure there was no outstanding finance on the car, with hpi and others you would stand no chance of being an innocent party in any of this, the lawyers for the finance company would tear you to shreds

Now take your 30 years of experience and plead your way out of that in any court
if your stupid or cheap enough to not spend the fee for a hpi check then you deserve to have it repo'd
Complete rubbish

Iain Mac

Anyone else want to join in? I'm going for a brew.

D-Sport

Why do you want someone to join in when your convinced I'm talking shite

That link you posted, all that says is you might have a case of being deemed innocent if your just after arriving from mars or anyone with half a brain and not after doing a hpi check or after taking reasonable effort to at least ask the guy and get it in writing from him on the receipt issued that no finance exists is going to have the car taken off them

zetecbeast

Have to agree with this... The article basically says, if you didn't take every available step (HPi checks ...) etc to find the info on the car, then you are not an innocent party and therefore lose title to the car to the finance company.

Seems a real grey area...

D-Sport

Can you imagine a finance company in court looking for 40 or 50k, their lawyers will rip that link to shreds if used

Also there is no way they would allow one case like that link to win because that sets a precedence for future cases which would decimate the whole lending arena

Psycho Warren

iTrader: (5)

I agree with Iain mac on the legal presedant and case law on this. Ive seen much the same before in cases of "innocent purchaser".

Also it is the banks responsibility to provide evidence that you are not a "innocent purchaser", NOT yours. If they illegally repossesed a vehicle and couldnt prove beyond a reasonable doubt that you were not a innocent purchaser then they would loose and be forced to return the car or compensate appropriately. I have seen this happen with work colleagues.

HPi checks are simply not necessary in the eyes of the law when it comes to finance cases like this. Not doing a HPi does not make you culpable and not subject to "innocent party" protection.

The law says nothing about you taking every available step... it merely says you did not know and couldnt reasonably be expected to have known. By not carrying out a HPI, you cant possibly have known!!

As an outside buyer you cant in any way have reasonably be expected to know.

where this comes into play is if you were buying it off a mate or family member in financial difficulty. then a bank could challenge you on the grounds that you should have reasonably known there might have been finance outstanding on it.

clearly if someone on a advert says outstanding finance, then youre fucked. Also if the guy tells the bank he told you, then they will pursue you although if it ever got to court its your word versus his and it wouldnt stand.

Even when you start to dig into various interpretations of the terms it is still fairly clear. No where does it say you must do a HPI nor does it say you should mistrust everyone selling a car....


However i will agree with d-sport to an extent in that although the case law aspects are clear, in practice what should happen by law and what happens in reality is often different.

It is a simple fact that debt collection agencys/partners and repo companies will if they think they can get away with it, break all FSA guidelines and finance laws if it helps them recover an asset or debt.

That means in reality they WILL try and take your car once they decide to pursue the debt. You will then have to fight your cause with a company that doesnt give a shit. The reality is these companies know that 99% of the people they deal with either arent clever enough or dont have the finance/access to legal support to defend themselves in such cases.

However if you do have access to a good solicitor then you watch them backpedal once a well worded formal letter from a solicitor lands on thier doorsteps Only the moronic ones will push it to court and mostly loose.

How it usually works for most people trapped by this is thier car gets taken, and they then have to pursue the company for compensation (the car will have gone to auction long before any resolution to the complaint occurs). If the victim gets it to court then they will almost certainly be awarded compensation once the court agrees they were an innocent purchaser. Remember the onus is on the bank to prove otherwise and the balance of proof is "beyond a reasonable doubt".

Iain Mac

Section 27 of the Hire Purchase Act 1964 was embodied in S27 of Schedule 4 of the CCA 1974.

If you look up the CCA 1974, scroll through the contents right down to Schedule 4 (Minor and Consequential Amendments). Look in Part III Section 27 and you will find the words under subsections 1 and 2:
27 Protection of purchasers of motor vehicles.

27(1)This section applies where a motor vehicle has been bailed or (in Scotland) hired under a hire-purchase agreement, or has been agreed to be sold under a conditional sale agreement, and, before the property in the vehicle has become vested in the debtor, he disposes of the vehicle to another person.E+W+S+N.I.
(2)Where the disposition referred to in subsection (1) above is to a private purchaser, and he is a purchaser of the motor vehicle in good faith without notice of the hire-purchase or conditional sale agreement (the “relevant agreement ”) that disposition shall have effect as if the creditor’s title to the vehicle has been vested in the debtor immediately before that disposition.

There is case law and precedent already. Here's just one example though it is slightly complicated by an Assignment Agreement and a Sub-Hire Agreement.
In effect, the finance co bought the car (a brand new Mercedes so not cheap), and HPd it to a fleet co, who then HPd it to the customer (the sub-hire). The fleet company didn't pay the HP company so they came and repo'd it and the innocent buyer sued the HP company (who he had no contract with) and won.

http://www.wragge.com/analysis_5647.asp

Psycho Warren

iTrader: (5)

the solictors cannot rip statute law to shreds. they can only present evidence that proves it doesnt apply.

The link posted by iain uses excerpts of the key important phrases used in the written statutes and acts.

also a solicitor cannot challenge the interpretations as they are clear too.

The only basis is to say that the purchaser ought to have reasonably known, and to win that arguement they will have to provide some evidence to back it up.

The finance laws in this country are mostly written to protect the consumer from dodgy and illegal practices. Debt recovery is only part of it.

It certainly wouldnt decimate the lending arena any more than it already has been decimated

Why do you think lenders go after the original purchaser so aggressively when they default on a hp car in the first place? because ones the car is sold on its much harder to get any money back, where as it is relatively simple and pain free to repossess a car from the original owner.

Iain Mac

Also, as far back as 1961 it was proposed in Parliament that the log-book should be marked as such on any car with outstanding finance.

An astoundingly good idea that was never taken up because of the admin involved in those pre-computers and database days. With all the current outbreak of log-book loans maybe the time has come to reintroduce the idea, along with a fee for adding/removing an interest.

Iain Mac

This is a 2012 case on a Porscge where the innocent buyer defence didn't work because the buyer DIDN'T satisfy the court that he had bought the car from a 3rd party or had no knowledge of the likeliehood of outstanding finance.

http://www.wragge.com/published_articles_8592.asp

Psycho Warren

iTrader: (5)

a simpler solution would be to ban all the "log book loans" and "pay day loan" scams.

in my opinion there is NO need for such "products" to be in existence. All they do in most cases is cause stupid and desperate people to get into more debt rather than submit the concept they claim to be based on.

The whole premise they are based on is flawed. Even if you are poor, someone with good money sense will budget appropriately for all normal bills and likely have the ability to deal with short term cash emergencys such as broken household white goods or similar things these shysters claim might be excuses to get these loans.

If you dont have enough money each month due to poor financial management or because you are stupid with money, then how is borrowing money now from next months wages going to help??? youll just be even more short next month

I cant see any reasonable situation where a payday loan is a reasonable or sensible option for anyone to use.

But yes, marking on the V5 would be useful to buyers.

Psycho Warren

iTrader: (5)

youre posting all the complex cases between various companys and agents and then onto private buyers rather than the more simple cases of a car bought by a private buyer under a direct HP agreement then sold on to another private buyer. Makes it far more complicated than it needs to be then!

Iain Mac

Agreed, but the complex ones are the ones that tend to go to court.

You will get no argument from me to suggest that these moneylenders do anything except prey on vulnerable (read poor, stupid, desperate as the mood takes you).

I don't think that the APRs are worth mentioning because the whole calculation is meaningless on low value, short-term deals. The simple fact is that at that end of the market, risk is a lot higher than on "respectable" lending.

Sadly, the mentality that it will be ok to rip off the lender just means that more banks won't lend at all, so the moneylenders advertise on prime-time tv and suck in more and more people who borrow from each of them in turn to pay off the last, and pawnbrokers get back into the game, holding on to granny's wedding ring till they get their pound of flesh.

When I started, I mainly dealt with consumer finance and even as an 18 year old I couldn't understand the mentality of taking out a 3 year loan to pay for this year's holiday.

Back then, we still had credit controls with minimum deposits for different kinds of assets - we used to joke about having a lot of 4-wheel furniture driving around, but in many ways it is a pity that we don't have the controls any more - I suspect that the current financial crisis would never have happened.

Iain Mac

A couple of private buyer cases:

• Barker v Bell [1971 2AER 867] - if your hirer tells the innocent purchaser that the finance has been settled, when in fact it hasn’t, and the purchaser believes him, the purchaser can still get good title. this doesn’t apply if your hirer says he is “about to” pay off the finance. Moorgate Mercantile v Twitchings [1977 AC 890] - failure to register your interest at HPI doesn’t matter.
• Good faith is equated with honesty and bad faith with dishonesty. Jones v Gordon 1877 - an abnormally low price was held to put a purchaser on enquiry. Mercantile Credit Company Limited v Rainham Metal Transport - where an innocent purchaser has any suspicion as to the title, his failure to ask the obvious questions is clear evidence of lack of good faith. Dodds v Yorkshire Bank Finance Ltd [1992 CCLR 84] - “I did not expect the chap to sign something if it was not right. When he signed it, I was not suspicious any more.”

Psycho Warren

iTrader: (5)

Further info from the OFT for simple cases:

The OFT stuff is a bit easier to read than the legal beagal speak in section 27 of the 1974 act!

Iain Mac

This is interesting about Log-book loans being written under the Bill of Sale Act and circumventing consumer rights (ignore the repeated reference to Higher Purchase - it's the BBC!)

http://www.bbc.co.uk/blogs/watchdog/...ook_loans.html

Psycho Warren

iTrader: (5)

The problem with log book loans is often the bill of sale is not done correctly and therefore invalid

However most people just dont know what they are signing and dont have the common dog to find out and challenge these things.

Although IMO if youre dumb fuck enough to take out a log book loan then you deserve all the hassle you get. However it is unfortunate if youre unlucky enough to buy a car with an outstanding BoS on it.