Is it legal for someone to run car club to sell cars?

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Xtreme 1

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Hi All,

The query I have is in relation to a particular garage owner and in particular to what I believe to be an illegal practice.

I know a lady that bought a car from this guy and she has to pay for it weekly, he uses cards for his customers and marks down their weekly payments and gets them to put their signature opposite the weekly amount.

This guy is not a licensed credit agency, but appears to be something of a loan shark, he gives people the log book of the cars on their first payment and the cars are then transferred into their names.

Is this practice legal as there are no finance companies involved, and what would be the situation if he was threatening to repossess an individuals car ?

He refers to these people as "the club" but as far as I can gather there is no credit agreement in place outside of his weekly payment records.

Look forward to your replies.
 
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Xtreme 1 said:
Hi All, The query I have is in relation to a particular garage owner and in particular to what I believe to be an illegal practice. I know a lady that bought a car from this guy and she has to pay for it weekly, he uses cards for his customers and marks down their weekly payments and gets them to put their signature opposite the weekly amount. This guy is not a licensed credit agency, but appears to be something of a loan shark, he gives people the log book of the cars on their first payment and the cars are then transferred into their names.
Is this practice legal as there are no finance companies involved, and what would be the situation if he was threatening to repossess an individuals car ?
He refers to these people as "the club" but as far as I can gather there is no credit agreement in place outside of his weekly payment records.
Look forward to your replies........
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From what you say, he is not holding the title or log books/VRC as security and it is not clear that he is charging any interest. So, is he like any shop which allows you to pay in for an item or a Christmas Club?
 
Hi Slim,
What he does is sells you the car at x amount, which is usually way above the market value, you then agree to pay him x amount per week until you have paid the full amount. There are no written agreements in place, the only document used is the weekly/monthly payment card. This is something that this trader does by himself and as such would not be regulated by the financial regulator. There is no reference to interest being charged and the log book is handed over on the day the deal is done, to be put into the buyers name. When the car is fully paid for he just rips up the card in your presence and that is your transactions completed. At no stage do you receive any type of invoice reflecting the fact that you have purchased a car from this individual.
 
I can't see anything worng here (excepting the moral side of things)

All he appears to be doing is selling a car at an agreed price, then lending the buyer the money at zero interest to pay for it.
 
My main query is in relation to him repossessing the car if the customer has defaulted on a few payments, but has paid over one third of the original price of the car.
As well as the Dept of Revenue not being too happy does he not have to have some sort of licence in order to lend the money in the first place ?
 
Xtreme 1 said:
My main query is in relation to him repossessing the car if the customer has defaulted on a few payments, but has paid over one third of the original price of the car.
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If he has handed over the log book, and the car is registered in the new owners name, then he can not legally repossess the car.

Hire purchase agreements cover this situation well, but it sounds like no such agreement is involved here.
 
There is no bill of sale, there is no credit agreement, all he has is a piece of cardboard with weekly/monthly figures and the individual has the car in their name. Should he not be regulated in some way if he is in the business of issuing credit ?
I am not %100 sure but I dont think the log book ever has his name on it, its just transferred from one owner to the next...........
 
Why begrudge the guy for offering a service which people want or need ? Unless you know something else about the guy which you have not revealed yet ?
 
At a guess i'd have thought it was finance himself or go out of business.

Very difficult to get finance currently on low value vehicles especially older ones. If he can finance and people pay him then theory is no different to borrowing money off a friend or relative to buy something.

The issues start when people stop paying before their finished....
 
Xtreme 1 said:
Hi Slim,
What he does is sells you the car at x amount, which is usually way above the market value, you then agree to pay him x amount per week until you have paid the full amount. There are no written agreements in place, the only document used is the weekly/monthly payment card. This is something that this trader does by himself and as such would not be regulated by the financial regulator. There is no reference to interest being charged and the log book is handed over on the day the deal is done, to be put into the buyers name. When the car is fully paid for he just rips up the card in your presence and that is your transactions completed. At no stage do you receive any type of invoice reflecting the fact that you have purchased a car from this individual.
Click to expand...

There has to be more to this than just this. With a HP Agreement, ownership of the car does not pass until the last payment. If a certain % of the payments are made and then a default occurs, this is provided for too.
Here, you say this guy/business passes ownership on the basis of making one weekly/monthly payment, writing same on a card and transfering ownership at this point. He must have some security over the goods as if your name is on the log book, and there is no HP Agreement, you are free to sell and then emmigrate/dissapear with the proceeds of the sale.
 
Xtreme 1 said:
..This guy is not a licensed credit agency, but appears to be something of a loan shark, he gives people the log book of the cars on their first payment and the cars are then transferred into their names...
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Just trying to understand your issues with this guy. Is he a bit 'suspect' in your opinion? If someone misses a few payments, would he be likely to turn up on their doorstep (or send someone intimidating), is he a bit of a heavy? It seems that, otherwise, he is taking a huge risk that he will not get paid for the car?
 
Lets just say that I know of one young mother who is finding it difficult to cope in the present climate and last week he showed up at her door and said that if he did not get his money he would have to repossess the car.
He does not sell to strangers in this way only to people he knows live in the town ..........
 
Xtreme 1 said:
Lets just say that I know of one young mother who is finding it difficult to cope in the present climate and last week he showed up at her door and said that if he did not get his money he would have to repossess the car.
He does not sell to strangers in this way only to people he knows live in the town ..........
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Well in that case why does she not just hand the car back???
 
Have a look here. It is clearly stated that selling goods at an inflated price, with regular payment is a form of money lending and money lending is regulated in Ireland to protect the consumer.

http://www.citizensinformation.ie/e...loans_and_credit/moneylending_in_ireland.html

If there is no signed agreement clearly stating the exact number and amount of payments, the borrower is at risk that the lender will keep asking for payments beyond the originally agreed term. it was a huge problem in Ireland for many years. Many money lenders used a threat of forced repossession or violence to get poor and vulnerable people to keep paying and ultimately paying interest rates of 100% or 200% on small loans.

In answer to the OPs question, the facts outlined look to me like this guy is breaking the Consumer Credit Act and his clients are at risk.

He should be reported to the National Consumer Agency and the Gardai, as
suggested by the website above.
 
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