# Car Finance Question



## ash26 (29 Mar 2012)

Hi All

Hopefully one of you can answer my question, my mum has a 08 Fiesta and there is just over €6,000 owing on the car. Her payments are paid on time every 2 weeks, a payment is due tomorrow so she rang the finance company this morning asking if it would be ok to lodge the money next week instead as the car is up for sale, the girl she was dealing with told her she was comitting fraud by having the car for sale and not notifying the finance company. She explained to them that she would be clearing the outstanding balance and the girl asked her if she would be making money from the sale. 

Can anyone advise if they came across a situation like this before? I have sold a car previously that had outstanding finance and never had an issue like this.

Thanks


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## Mongola (29 Mar 2012)

Your mum has the finance on the car. The agreement was between herself and the dealer/finance company (dealer or it could be a bank), not a thrird party.  As far as they know, she could sell the car, for which she still owes money on and not turn the money over to them. 

While I am sure, those are not your mum's intentions, otherwise she would not have rung them to extend her next repayment date, this, unfortunately happens. People find themselves buying cars which still have finances on them: not an ideal situation. I can completely understand where they are coming from.


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## 44brendan (29 Mar 2012)

Sounds like a ridiculous over the top response and she should ignore it.


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## ash26 (29 Mar 2012)

Thanks for the reply's i can understand that people are selling cars and not paying off the finance but this will not be the case and she explained this to the finance company but they still went ahead to tell her she was comitting fraud! I think i will take brendan's advise and tell her ignore it.


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## peteb (29 Mar 2012)

At your peril! They technically own the car until the last payment is made or the balance cleared.  So you don't have their permission to sell the vehicle.  These days people are cautious about buying cars and ask whether there is finance outstandinng.

Because as someone mentioned earlier your mother could sell the car, not pay the money and then the finance company could recover the car from the purchaser as they don't have legal title to it.  And the purchaser finds themselves down a few grand and a car!


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## mark1 (29 Mar 2012)

44brendan said:


> Sounds like a ridiculous over the top response and she should ignore it.


 
ridiculous advice to give anyone. the car actually belongs to the finance company. if she does try to sell it anyone with a bit of savvy will do a cartell report and find out there is outstanding finance anyway.


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## Mongola (30 Mar 2012)

I completely agree with mark1, I don't think ignoring them is good advice here. If it had been a loan from a bank or lending institution, your mum would own the car and therefore could sell the car without alerting the bank. However, it seems to be a hire purchase type of situation (please correct me if I am wrong here), so she does not own the car and the ownership remains in the hands of the finance of the company. 

If they agree to that deal: great but she should not sell it without their permission. As far as saying fraud...I purposely did not use that word as it may be strecthing it, in my opinion but it would definitely be a breach of contract.


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## 44brendan (30 Mar 2012)

> Sounds like a ridiculous over the top response and she should ignore it.


Remark related to the accusation by fraud and not the fact that the HP company have the right to the sale proceeds of the car. OP was advising the HP of the pending sale of the vehicle and that her mother was proposing to clear the loan with the sale proceeds. Normal response would not be to accuse the seller of fraud!


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## peteb (30 Mar 2012)

Yeah but you are misleading the OP to believe her mother can just go off and sell the car.  Fact of the matter is that the car is not her mothers to sell without the explicit permission of the owner.  In this case the finance company.


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## Woodie (30 Mar 2012)

With finance outstanding on the car it may be a problem to sell and the finance company has a point. The correct course of action is to :

1.Apply to have the remaining loan converted to a personal loan.
2. Clear off the car finance.
3. Sell the car.
4. Clear the personal loan.

I guess this is the advice the finance company should have offered rather than the ...it's fraud ....lock her up route....even if technically correct! I guess like everyone the finance company staff are on edge with people walking away from loans and their own jobs none too safe. This downturns certainly does not bring out the best in some people.


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