# Sold car not realising finance outstanding - who is liable?



## sparkle (4 Sep 2009)

My brother recently traded in his car at a garage. Yesterday he received a phone call from the garage saying that there is finance outstanding on the car and that he has to pay them €2,900 or else they will take legal action.

Unfortunately, he did not carry out the check to see if there was finance outstanding on the car when he purchased it from a garage 2 years ago. When he contacted the finance company (GE money) they told him that they could not give him any information as he was a third party. The garage that he bought the car from 2 years ago is no longer trading. 

The car is currently for sale in a garage in kilkenny (found through an internet search) so we don't know if the garage that he traded it into is even the registered owner at this stage.

Is my brother liable for the finance outstanding? What steps should he take now? Any advice would be greatly appreciated.


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## jhegarty (4 Sep 2009)

Sounds like he is liable.


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## callybags (4 Sep 2009)

Would the garage he sold the car to not be liable?

This is assuming all the paperwork has gone through and his name is off the documents.

I would have thought the garage should have run a check before they bought the car ( as should the OP's brother)


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## mercman (4 Sep 2009)

Your brother probably requires to contact the SIMI to discuss the matter and to check as to whether the Garage where he purchased the car was a member and if there are any other persons that became involved with a similar problem.


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## sparkle (4 Sep 2009)

Quick update for you:

When my brother signed over the car to the garage there was a question on the paperwork asking if there was any outstanding finance on the car. He declared that there wasn't as that was his genuine belief at that time.

However, we have since discovered that the garage is no longer the registered owner of the car. The car seems to have been traded through 2 other garages in the meantime. Surely, the garage that he sold it to cannot pursue him for the money if they are no longer the owners of the car. I would think that the garages that the car was sold on to had the same responsibility to carry out checks on whether there was any finance outstanding on the car.


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## mathepac (4 Sep 2009)

It sounds like your brother signed the SIMI contract declaring there was no finance outstanding on the car and indemnifying the dealer in case his declaration was untrue. He owes the money.

The subsequent dealers are in the clear - your brother has a contract with the first one to clear the finance.


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## mercman (4 Sep 2009)

But they are out of business according to the OP. This is why I suggested the SIMI.


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## mathepac (4 Sep 2009)

mercman said:


> But they are out of business according to the OP. This is why I suggested the SIMI.


The garage he bought it from are bust; the crowd he traded it to are chasing him. (at least that's my reading of the situation, aw righ' bud?)


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## LS400 (4 Sep 2009)

sparkle said:


> My brother recently traded in his car at a garage. Yesterday he received a phone call from the garage saying that there is finance outstanding on the car and that he has to pay them €2,900 or else they will take legal action.
> 
> If the finance is outstanding on the car, then the car belongs to the finance co until all monnies are discharged. It was not the property of the garage to sell to you. The fact the garage has gone, leaves you hanging out to dry.
> 
> ...


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## VOR (7 Sep 2009)

GE Money will go after the borrower firstly to recoup the €2900. If that fails, they should look for the money from the garage that sold the car to your brother. Generally, it is taken that it is the responibility of the garage to check for outstanding finance. The finance should be cleared before they take possession.
As that garage are out of business your brother is in a sticky situation. 

He should send a letter to GE and say he was sold a car with outstanding finance. Make sure he makes them aware that he did not realise this when buying the car. He should then tell them that he has now sold the car to X garage who have only now made him aware of the finance. He should tell GE where the car is now and that he is not liable for the finance as he bought the car in good faith from a garage. 

Sign off the letter with "please don't hesiate to contact me " etc. etc and leave it at that. GE will go after the original owner first. If that fails they can take it up with the garage that now has it. It's their car afterall and the garage's  mistake.

Your brother had the car but acted in good faith. He was not made aware of the finance when he purchased from a reputable well known garage. Nor did he act fraudulently when selling. The trade-in garage should have checked the finance. It is their mistake. Let them deal with GE. 

He's well rid of it and can count himself lucky he doesn't still have it. I am guessing GE will take the car from the garage and they will have learned a tough lesson.


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## Complainer (7 Sep 2009)

I'm not so sure that the brother should jump into getting this sorted. This could be taken as some kind of admission of liability. Tread cautiously, and consider getting legal advice.


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## John Rambo (7 Sep 2009)

I'd also recommend speaking to a solicitor. The major issue would seem to be the existence of a document signed by your brother stating that there was no outstanding finance on the vehicle, when in fact there was. Innocent error or not, that document is the "smoking gun" in this case.


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