Car Finance

[Ladidi]

Hi everyone Long time no see...Sorry about that...I am just hectically busy these days trying the keep my head above water...

My question today is not for me...but a friend of mine.

They are currently being taken to court for finance of a car that was taken out on 21/1/2008.

At the time of the finance being taken out they was a good job and earning good money and could afford what they had done.

However at the end of 2010 the company they worked for ceased trading and they no longer had a job and could not afford the payments until new employment was found, whereby they came to an agreement with the company to go onto part payments until new employment commenced.

They made the first payment as agreed, and then received a letter saying thank you and that your next payment was to be the full amount.

They argued this and said they could not afford this as new employment had not commenced.

The company then said if they could not maintain the payment they would retrieve the vehicle. After much thought it was decided the best thing was to let the company retrieve the vehicle.

They company then back tracked and said we cant retrieve the vehicle until it was put in writing. The letter was then faxed to them stating they could have the vehicle. Weeks passed and they has still not retrieved the vehicle.

A phone call made and they was told the wording in the letter was incorrect and had to be corrected before the vehicle could be retrieved.

A new letter was faxed giving the correct wording they requested.

A few weeks went by and they still did not retrieve the vehicle.

Put of the blue came a letter stating there was arrears of a few thousand pounds and that they wanted the payment within 14 days or vehicle.

They was called and reminded of the faxes sent stating they could have vehicle. The company then said we dont want the car we want the money...At the end of it all they told the company to take them to court as they were fed up of their attitude to resolving the issues.

The vehicle is in storage which is where it has remained for nearly 1 yr. it has not tax or mot or insurance.

The court papers state that the company want ten vehicle back and when sold if there is any outstanding balances remaining they want that plus interest.

So far the car depreciated in a value of at least £7,000. just over 1 year ago the car was valued at £21,000

The amount claimed on the papers state that the amount claimed is £24,811.23 Court Fee £175.00 Solicitors costs £100 total amount £25,086.23 plus interest of 8% per day.

The total price of goods was £28468.00 including a deposit of £2588.00
They have paid so far £9956.30 including the deposit of £2588.00
Unpaid balance of £21,421.54

A default notice was served on 18/05/2011. Yes this has been going back and forth since they lost their employment in November 2010.

Can anyone offer me some help or advice for them???

[Ladidi]

Re: Car Finance

Hi everyone Long time no see...Sorry about that...I am just hectically busy these days trying the keep my head above water...

My question today is not for me...but a friend of mine.

They are currently being taken to court for finance of a car that was taken out on 21/1/2008.

At the time of the finance being taken out they was a good job and earning good money and could afford what they had done.

However at the end of 2010 the company they worked for ceased trading and they no longer had a job and could not afford the payments until new employment was found, whereby they came to an agreement with the company to go onto part payments until new employment commenced.

They made the first payment as agreed, and then received a letter saying thank you and that your next payment was to be the full amount.

They argued this and said they could not afford this as new employment had not commenced.

The company then said if they could not maintain the payment they would retrieve the vehicle. After much thought it was decided the best thing was to let the company retrieve the vehicle.

They company then back tracked and said we cant retrieve the vehicle until it was put in writing. The letter was then faxed to them stating they could have the vehicle. Weeks passed and they has still not retrieved the vehicle.

A phone call made and they was told the wording in the letter was incorrect and had to be corrected before the vehicle could be retrieved.

A new letter was faxed giving the correct wording they requested.

A few weeks went by and they still did not retrieve the vehicle.

Put of the blue came a letter stating there was arrears of a few thousand pounds and that they wanted the payment within 14 days or vehicle.

They was called and reminded of the faxes sent stating they could have vehicle. The company then said we dont want the car we want the money...At the end of it all they told the company to take them to court as they were fed up of their attitude to resolving the issues.

The vehicle is in storage which is where it has remained for nearly 1 yr. it has not tax or mot or insurance.

The court papers state that the company want ten vehicle back and when sold if there is any outstanding balances remaining they want that plus interest.

So far the car depreciated in a value of at least £7,000. just over 1 year ago the car was valued at £21,000

The amount claimed on the papers state that the amount claimed is £24,811.23 Court Fee £175.00 Solicitors costs £100 total amount £25,086.23 plus interest of 8% per day.

The total price of goods was £28468.00 including a deposit of £2588.00
They have paid so far £9956.30 including the deposit of £2588.00
Unpaid balance of £21,421.54

A default notice was served on 18/05/2011. Yes this has been going back and forth since they lost their employment in November 2010.

Can anyone offer me some help or advice for them???

I have just read their agreement and it states.....Reposession your rights....If you do not keep up your side of the agreement and you have paid 1/3 of the amount due £11,037.98 we may not take back the goods without a court order. If we do take back the good without your consent or a court order you have the right to get back any monies you have paid plus interest.

They have informed me that they was bullied into making agreements into giving them the car back and to making payments they could not afford to make which as has lead to the above.

[bluebottle]

Re: Car Finance

If the vehicle was purchased on HP and the minimum number of payments required to prevent the finance company snatching back the vehicle without a court order has passed, it is a case of "No court order, no vehicle."

The finance company in this case appear to be totally disorganised and the left hand does not appear to know what the right hand is doing. I note that the value of the vehicle has depreciated by some £7,000 whilst it has been in storage, which is due entirely to the ineptitude and incompetence of the finance company in failing to collect it and arrange its early sale.

I am somewhat concerned that the finance company is attempting to claim more than it is actually due. The outstanding balance is £21,421.54, court fee of £175.00 and solicitor's fee of £100.00. By my calculations, that comes to £21,696.54. So where does the other £3,689.69 come from? If I were your friend, I would go back to the finance company and ask them to explain their figures. If they are unco-operative, your friend should query the figures with the court that issued the court papers, citing that this would put the finance company in a better position, financially, than they would have been before the alleged breach of contract occurred. This could amount to Unjustifiable Enrichment. The relevant case law is Dunlop Pneumatic Tyre Co. -v- New Street Garage and Motor Co. 1915.

If I were your friend I would certainly challenge the finance company's figures and the interest they are claiming. The staff at the court office should be able to advise your friend what the finance company is entitled to claim. If your friend has not yet submitted a defence in accordance with the Civil Procedures Rules 1998, they should do so without delay, citing the finance company's failure to collect the vehicle and achieve an early sale, when the vehicle was worth £21,000, as failure on the finance company's part to mitigate their losses. A judge has to take into account any failure on a plaintiff's part to mitigate loss.

I can make no guarantees and I am not a legal professional, but I would say that your friend may well have grounds for having the finance company's claim truncated or struck-out in part. It may also be advisable for your friend to seek professional legal advice.

[lindalou]

Re: Car Finance

Hello

Yes this is correct section 90 of the Consumer Credit Act says that the company can only take the car if less than one third of the cost is paid , otherwise they have to get a court order.
This does not men that the agrement cannot be terminated earlier by the lender.
There should be a clause in the agreement about early termination.

The lender would have to pay some of the amount due on the contract, but by no means all of it, if the lender had paid one half of the cost they would have been legally entitled to return the car with no further payment(Section99).

LL

[Ladidi]

Re: Car Finance

Thank you, its very interesting to know.

Your right they would be better off getting a legal expert to look over their paper work and argue it on their behalf more constructively than I can...I`m by no means a legal expert on maters but I do try my best at times

I will look into this paragraph...

I am somewhat concerned that the finance company is attempting to claim more than it is actually due. The outstanding balance is £21,421.54, court fee of £175.00 and solicitor's fee of £100.00. By my calculations, that comes to £21,696.54. So where does the other £3,689.69 come from? If I were your friend, I would go back to the finance company and ask them to explain their figures. If they are unco-operative, your friend should query the figures with the court that issued the court papers, citing that this would put the finance company in a better position, financially, than they would have been before the alleged breach of contract occurred. This could amount to Unjustifiable Enrichment. The relevant case law is Dunlop Pneumatic Tyre Co. -v- New Street Garage and Motor Co. 1915.


I agree their maths seems a little some what out of place...

[bluebottle]

Re: Car Finance

Hi Ladidi,

I think it is best to let a legal professional look into the matter. If your friend does have to apply to the court to have the finance company's claim truncated or struck-out in part, that will need to be done by a legal professional. It's not something that should be attempted by a layperson. Also, the Legal Services Act 2007 lays down who can make applications and present cases in courts. As this is litigation, it will need to be a legal professional registered with the Solicitors' Regulatory Authority (SRA). If they mess up, at least your friend's got some protection.

I would certainly tell your friend to mention the finance company's failure to collect the vehicle and letting it depreciate to a legal professional as it may well amount to failure to mitigate loss. I don't know why, but I have this very strong gut feeling the finance company are trying to pull a fast one.

I wish your friend the very best of luck in getting this matter sorted out.

[lindalou]

Re: Car Finance

Hmm
Yes peobably best let a solicitor look at this, to be honest i am not sure the one third rule apies on this, on second thought the purchase price is over 25K so the consumer credit act would not apply in early 2008.
The settlement figure woujld have been calculated using the early settlement regulations. it is possible for the amount to be more than you think it depends on the APR of the agreement.

Not sure how the Dunlop case comes into this, i thought that was concerned with contractural breach, this is sums due on termination of contract, could be wrong
LL

[bluebottle]

Re: Car Finance

Hi LL,

Dunlop Pneumatic Tyre Co. Ltd -v- New Garage and Motor Co. Ltd 1915 is one of the cornerstones of civil litigation in England and Wales and lays down that a plaintiff cannot be better off financially than they were before, that is, they can only claim what they have actually lost, plus any court costs awarded. The purpose of civil litigation is to put a plaintiff back in the same position they were in before the loss occurred, not to enrich them.

One of the other rules applicable to civil litigation is that a plaintiff must keep all and any losses to an absolute minimum. If they fail to do so, a court can truncate their claim or strike-out that part of the claim they have failed to mitigate.

In this case, the finance company indicated to the debtor that they intended to repossess the car and the debtor did not prevent them from doing so. They had every opportunity to collect the car when its value was £21,000, but did not and allowed it to depreciate by £7,000 in value to £14,000. A court would consider that to be a failure on the part of the finance company to mitigate its loss as it had the opportunity to collect the car and sell it when its market value was higher. It is also a well-known scam of the finance industry to do things like this to unjustifiably enrich themselves. The reason they get away with it is because consumers do not realise they can challenge what finance companies claim and, in most cases, cannot afford legal representation to make the challenge.

I would question the legality of a finance company attempting to apply early settlement figures to an agreement they had decided to terminate. Again, is this another scam practised by the finance industry to unjustifiably enrich themselves? Most probably, yes.

During the time I spent as a CID officer, a lot of the cases I dealt with involved fraud of one sort or another. This often involved working alongside Tax Investigators, Customs & Excise and Trading Standards Officers. I learned a lot about the dark arts practised by the finance industry during that time. Although they get away with quite a lot, when they get caught, they howl and scream and try to make themselves out to be the victims in order to avoid being held to account. I've heard and seen most of the strokes they pull. Sorry if I sound cynical, but I wouldn't trust a finance company as far as I could throw them. Very few have good repute. And it's entirely their own fault.

[lindalou]

Re: Car Finance

Yes i know i did it as part of my theses


It refers to breach of contract not to repuiatory breach and that pre estimates of liquidated damages must not be unconscionably in excess of the actual cost of the breach, this is a repudiatory breach the common law principle of which you speak does not apply.
This copntract would have been duly terminated and all liabiltities under the contract would be payable.

LL

[lindalou]

Re: Car Finance

[quote=bluebottle;245840]Hi LL,


I would question the legality of a finance company attempting to apply early settlement figures to an agreement they had decided to terminate. Again, is this another scam practised by the finance industry to unjustifiably enrich themselves? Most probably, yes.

Of course they apply early settlemet calculations , always have.

They terminated after breach of the lender, they are entitled, either that or every creditr that has taken a debtor to court for none payment has broken the law

LL

[bluebottle]

Re: Car Finance

Hi LL,

Yes. I'm fully aware of early settlement figures when I've settled loans early. That's always been the case and it's perfectly legal for finance companies to do that, under such circumstances.

I've just read the OP's posts again and noticed something that could prejudice the finance company's claim and that is alleged irresponsible lending. Don't forget that a court has the power to truncate or strike-out a claim where there is evidence of irresponsible lending.

The OP has been advised to let a legal professional deal with this case and I think it is going to be interesting to see what the outcome is.

[CleverClogs]

Re: Car Finance

Sorry if I sound cynical, but I wouldn't trust a finance company as far as I could throw them.

Would that be by yourself or would it involve the use of a trebuchet? :nerd:

[charitynjw]

Re: Car Finance

Hmm
Yes peobably best let a solicitor look at this, to be honest i am not sure the one third rule apies on this, on second thought the purchase price is over 25K so the consumer credit act would not apply in early 2008.
The settlement figure woujld have been calculated using the early settlement regulations. it is possible for the amount to be more than you think it depends on the APR of the agreement.

Not sure how the Dunlop case comes into this, i thought that was concerned with contractural breach, this is sums due on termination of contract, could be wrong
LL

I thought the £25k cap was removed by CCA 2006 (in force 6th April 2007), except for business lending.