Bought Car Without Knowing It Was on HP

J

JoeHooker

Registered User
Messages
69
Hi,

I purchased a new car in May i think of the year gone, from a guy, and payed part cash part bank draft for the car. I collected the car, got all the manuals and keys, filled in my details on the VRC for him to post it off. Meanwhile almost 3 months later my misses whilst driving home one night took a spin and ended up writing the car off.

I went through the insurance and settled with them for a cut off what i had paid for the car. Thats fine until the other day i recieved a phone call, from the insurance company, they are trying to close the case on the car but there is still outstanding finances on the car with a well known Bank. But i never agreed to take over any finances and at the time i never even looked into the finances on the car, i did get a Garda mate to check it out and he said it was sound.

I got in contact with the bank, they wanted my details, a copy of the VRC to prove that the vehicle was transfered to me, now i dont have the VRC since i gave it to the insurance company when they wrote the car off, but they are sending me a copy of it to send to the bank. I think there is an investigation on into the finances owed by the client of the Bank.

My question is does anybody know where i stand with this, should i be worried or is it up to the bank to reclaim these finances from the previous owners since they did give them the car, i'm sure they also have an address for the person i bought the car off.
 
Re: Bought Car Without Knowing It Was on HP!

I think you could have a big problem if the HP co. owned the car.

A bit late now, but why didn't you run a data check on it?
 
Re: Bought Car Without Knowing It Was on HP!

I think (don't know how successful you will be) that you need to advise the hire purchase company that you were a 'bona fide purchaser for value. Basically that you bought the car for a fair price unaware of the hire purchase agreement. It's up to the hire purchase company whether they accept this or not and decide to pursue the previous owner. Trouble is legally you could be/ are probably liable
 
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Re: Bought Car Without Knowing It Was on HP!

Unfortunately if you buy a car with outstanding finance you become liable for its discharge. You are the registered owner of the vehicle. Finding out if a vehicle is clear of any encumberances is one of the purposes of having a vehicle check done in advance when purchasing second-hand. I was in the position once of having put a deposit on a lovely second-hand car. When the RAC ran a check they found there was outstanding finance. I walked away. Lost my deposit but didn't inherit the outstanding repayments.
 
Re: Bought Car Without Knowing It Was on HP!

Marie said:
Unfortunately if you buy a car with outstanding finance you become liable for its discharge. You are the registered owner of the vehicle. Finding out if a vehicle is clear of any encumberances is one of the purposes of having a vehicle check done in advance when purchasing second-hand. I was in the position once of having put a deposit on a lovely second-hand car. When the RAC ran a check they found there was outstanding finance. I walked away. Lost my deposit but didn't inherit the outstanding repayments.
Click to expand...

think it's the same story if you end up buying a car that was stolen... original owner gets the car and you lose the cash...
 
Re: Bought Car Without Knowing It Was on HP!

Hi Joe

You bought a car owned by a bank.

You paid money to someone who did not own the car. That is not the bank's fault. It's yours unfortunately, so you will have to pay the bank.

You can sue the guy who the money from you fraudulently.

Brendan
 
Re: Bought Car Without Knowing It Was on HP!

This seems a crazy situation to me. Now, I can well understand a finance company repossessing the car from the unsuspecting purchaser in the event of the seller defaulting payments.
What I don't understand is how the new car owner can immediately become liable for an agreement that they never signed. The seller broke the law by selling the car and not settling with the finance company. So the seller should be pursued, not the poor buyer.
Yes, we can argue that people should do a HPI check, but it's not a requirement of purchase either. If it was, it should be the responsibility of the seller to produce a HPI report. I actually think that should be made law, but that's another matter.
Someone please explain to me how someone can become liable to a finance agreement that they did not sign or weren't aware of.
 
Re: Bought Car Without Knowing It Was on HP!

Like Thrifty said above, as far as i am aware you can argue you were a "bone fide purchaser for value without notice".

This is where an innocent party purchases property without notice of anothers party's claim to the title of it.
This is subject to certain restrictions - transaction must be properly recorded, all reasonable checks must have been made , etc.

But if successful the bank may pursue the seller of the car rather than the purchaser. Worth a shot.
 
Re: Bought Car Without Knowing It Was on HP!

Jbbcie, i know it sounds unfair but the nature of a hire purchase agreement is that the car is not owned by the other person until its fully paid for. Its like a secure loan on the car in a way - so the debt remains with the car. i really think somethink should be introduced where a hire purchase provider is required to have their interest noted on the car documents so that a purchaser can see they have an interest in the car and can resolve this before buying or walk away.
 
Re: Bought Car Without Knowing It Was on HP!

If the bank noticed anything sooner I'd suspect teh original owner is still payign the repayments to the bank? i.e. the original owner still acknowledges he owes the bank and is paying it off as he originally agreed.

A simple solution to this is that the original owner will continue to pay the bank. If you can discuss this with the bank and maybe with the original owner it may help stop a lot of stress. I'm sure its waht all parties would like. The bank get there money, you are not liable and the original owner is not brought to court by you.
 
Re: Bought Car Without Knowing It Was on HP!

jbbcie said:
....
Yes, we can argue that people should do a HPI check, but it's not a requirement of purchase either. If it was, it should be the responsibility of the seller to produce a HPI report. I actually think that should be made law, but that's another matter.
Someone please explain to me how someone can become liable to a finance agreement that they did not sign or weren't aware of.
Click to expand...

[SIZE=-1]What is it they say? Ignorance is no defence in law.[/SIZE]
 
Re: Bought Car Without Knowing It Was on HP!

There is a bit of a process gap here, surely.

If the registration and ownership documents for the car indicate that Joe Customer is the reigstered owner of the car, then why should a potential purchaser need to estabish how the owner funded the purchase ? The official document in front of the potential purchaser clearly states that Joe Customer is the owner of the car.

If the bank owns the car, then logically they should have their name recorded on the document as the owner. Or, like a mortgage deed, have Joe Customer down as the owner, but with the bank having a claim over the asset.

z
 
Re: Bought Car Without Knowing It Was on HP!

JoeHooker said:
Hi,

I got in contact with the bank, they wanted my details, a copy of the VRC to prove that the vehicle was transfered to me, now i dont have the VRC since i gave it to the insurance company when they wrote the car off, but they are sending me a copy of it to send to the bank. I think there is an investigation on into the finances owed by the client of the Bank.
Click to expand...

I think you've now been told all the bad news you didn't want to hear, but you've said above that you've been in touch with the bank, who are carrying out an investigation into the amount owed, so don't get too stressed just yet! Maybe the bank will see there is no merit in pursuing you for amounts owed by another...how much is owed by the way! Any outstanding amount will probably be enough to stall your insurance claim, but if the amount is relatively small, it should be in everyone's interests to move on. It is possible that the seller is still a customer and in contact with his bank, and may intend to clear his debt! Have you tried contacting the seller?
 
Re: Bought Car Without Knowing It Was on HP!

zag said:
There is a bit of a process gap here, surely.

If the registration and ownership documents for the car indicate that Joe Customer is the reigstered owner of the car, then why should a potential purchaser need to estabish how the owner funded the purchase ? The official document in front of the potential purchaser clearly states that Joe Customer is the owner of the car.

If the bank owns the car, then logically they should have their name recorded on the document as the owner. Or, like a mortgage deed, have Joe Customer down as the owner, but with the bank having a claim over the asset.

z
Click to expand...

You are right that should be the case but it isnt. The customer's name is on the registration deeds but the bank actually own the car until the finance is cleared.

Again i agree with Thrifty there should be some way of recording the interest of the bank on these deeds to avoid a situation like this.

At the end of the day the potential purchaser is responsible for running a HPI check but in reality most people may not know to do this or as in the OP case he thought the check his Garda friend did would have uncovered this.
 
Re: Bought Car Without Knowing It Was on HP!

Are the monies owed enough to be stressed over?

i.e. is it a 4 year old Micra, or a 1 year old BMW?


HPI checks are easy to talk about after the fact, but I'm not convinced that many people do them when purchasing
 
Re: Bought Car Without Knowing It Was on HP!

Thrifty said:
Jbbcie, i know it sounds unfair but the nature of a hire purchase agreement is that the car is not owned by the other person until its fully paid for. Its like a secure loan on the car in a way - so the debt remains with the car. i really think somethink should be introduced where a hire purchase provider is required to have their interest noted on the car documents so that a purchaser can see they have an interest in the car and can resolve this before buying or walk away.
Click to expand...

Thrifty, I understand the concept of a purchase agreement. Fair enough, if the finance is secured on the car, then the car belongs to the finance company until the agreement is paid. Maybe I'm misinterpreting the OP here.
Okay, so the car is written off, the insurance company try to settle, so logically the insurance settlement would go to the finance co (assuming this can ever be sorted between the two, god knows insurance companies aren't a favourite of mine).
But are we also saying that any outstanding costs (difference between insurance and money owing on car etc.) is now the responsibility of the buyer?
Any clarification is welcome, I'm confused :confused:
And I completely agree with you, regarding the finance co. having their interest noted on the registration document, as I believe they do in some other countries.
I think legally enforcing the seller to produce a HPI report is definitely worthwhile, it's only €15 after all (maybe additional cost if it had to be posted out), probably less than a decent advert (maybe I'm wrong, haven't sold a car in a while !)
At least that way, if buyers and sellers knew that they had to produce/see this report, neither would have an excuse when the deal was done. And it saves buyers having to pay a €15 fee for every car they're interested in, which could mount up.

Has a car ever been repossessed where the seller still paid the instalments, but because the seller broke the agreement (and AFAIK the law) by selling the car and not settling, then the finance co. have repossessed the car, because the agreement has been breached? I'm sure they could do it, although I've never heard of it happening, only when repayments were defaulted.
 
Re: Bought Car Without Knowing It Was on HP!

Guys,

Thanks for all your help, i may indeed be getting stressed over nothing, i'am unaware to the amount of finance owned on the car i didn't recieve much information from the lady i was talking to with the bank, she was very harsh with me, well so i thought. We are talking about over €20,000. I know it sounds stupid now but i should have checked the finance of the car but i never thought for a minute there was any problem, i did get it checked with a Garda friend and he said it was as clean as a whistle.

I have not as yet contacted the seller as i am waiting for the bank to get back to me and fill me in on some of the details. It could be nothing maybe they are short a months or twos payment i don't know. But i don't think the lady from the bank had the right to treat me like the bad guy or criminal. I can't understand however, how this finance can fall into my lap, surely i would have had to change the finance deal over to my name, or my bank account if this was so. I do know if i am lamped with this hefty re-payment i'm up the old brown creek without a paddle, i'm building a house at the moment and i could do without all this hassle.
 
Re: Bought Car Without Knowing It Was on HP!

JoeHooker said:
" i did get it checked with a Garda friend and he said it was as clean as a whistle"

I don't think a Garda could advise on credit agreement status, only if there were outstanding tickets, or if it had been stolen....but I'm open to correction!

"I have not as yet contacted the seller as i am waiting for the bank to get back to me..."

Don't wait, especially with only weeks to go to Christmas...chase the bank as you need your claim settled, and make contact with the seller immediately...if you can!

QUOTE]
Click to expand...
 
The claim with the insurance company is settled, thats been done sometime in october i lost a few thousand on it, but i was happy i got away with what i did, it would have been worse if the misses was injured in any way.
 
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