Finance on car from previous owner

[emdee1980]

I have a friend who had a car brought from a garage, problem is that the car is now in a garage from an accident and the insurance will not allow them to have the car back as there is outstanding finance on it from the previous owner, am trying to find out what advice I can give them on how to get the car back, any help will be gratefully appreciated

[labman]

Re: Finance on car from previous owner

If they were an innocent purchaser of the vehicle and did not know there was outstanding finance, legally they own the car. However proving they are an innocent purchaser is the harder bit. For example, if they bought the car at a very low price that seemed too good to be true, then they should have had suspicions and may not be deemed an innocent purchaser. If they paid the full going rate for the car, then there may have been nothing to raise their suspicions and all should be well.

The insurance company would, I imagine, have not much ground to stand on 'impounding' the vehicle, as it is not theirs to impound. It is for the finance company and your friend to resolve, and this may, sadly, need to be in court. It depends entirely on if they can prove they were an innocent purchaser.

Was the car written off in the accident and this is why the insurance company are laying claim to it?

[bluebottle]

Re: Finance on car from previous owner

The best way to find out if the car has been declared a total loss (write-off) is to contact the police force who dealt with the accident the vehicle was involved in. Contact the Road Traffic Collisions Unit (RTCU) if it was Damage Only or a Personal Injury incident. If the accident was a Serious Personal Injury, Suspected Fatal or Fatal incident, contact the Accident Investigation Unit (AIU) or Serious Collisions Unit (SCU) - each police force has its own name for these units.

As for an insurance company allegedly impounding a vehicle they have an interest in on the grounds it has finance owing from the previous owner/keeper, I have not come across this, except in cases where the insurer is the financier, in which case, the impounding is perfectly legal. If, as Labman says, the car was purchased in good faith, that is, the buyer held the genuine belief the seller had good and proper title in it, they might have a claim to the vehicle. However, if a finance company does have and can prove an outstanding financial interest in the vehicle, technically and legally, they still own the vehicle. However, it may take a court to decide whether the finance company is entitled to lay claim to it.

[labman]

Re: Finance on car from previous owner

I believe it is accepted now that a first 'innocent' buyer has good title, regardless of a finance company having interest in the vehicle. I may be wrong, but I'm sure I've read that several times. As both of us said, it may well take a court case to prove this. I am unsure as to the relevant legislation coverning this, or of the case history.

[wales01man]

Re: Finance on car from previous owner

In an episode of POLICE INTERCEPTORS a couple driving a car they purchased was seized by police as it was found to be owned by Motability the driver innocently and in good faith purchased the car then lost it ,does the same not apply here i know my son had the police collect a car he brought that was still legally owned by someone not the seller from who he brought it

[labman]

Re: Finance on car from previous owner

i know my son had the police collect a car he brought that was still legally owned by someone not the seller from who he brought it

That is different in a way, as the police were recovering a stolen car, rather than a car with outstanding finance.


The Consumer Credit Act 1974 gives ‘good title’ to the innocent private purchaser of a car which later turns out to be subject to a claim by a finance company because of a previous, unpaid hire-purchase agreement. This means that the finance company is not entitled to repossess the car from you. Remember, this does not apply to cars which have been stolen, or cars that were subject to a lease or hire agreement.

See link below:

http://www.warwickshire.gov.uk/corpo...256DE2005F50CD

[Guest]

Re: Finance on car from previous owner

HI

I think more information is needed here.
The garage that sold the vehicle to your friend presumably bought the car whilst still under and an agreement with a finance company?

Or did the garage reposes the car whilst under an agreement then sell it to your friend without terminating the old one?

It may be that the garage that sold the vehicle did not themselves have correct title, we do not know without the full details.

I fail to see what the insurance company has to do with any of this to be honest.

Yes the innocent purchaser has legal title to the goods under the Hire Purchase act 1965(via cca 1975), but only if legal title has passed to the seller.

Peter

[labman]

Re: Finance on car from previous owner

I fail to see what the insurance company has to do with any of this to be honest.

Peter

.... which is exactly what I said in post 2 and really is the crux of this. Legal title can be argued later, but the insurance complany really should have nothing to do with this. :beagle:

[emdee1980]

Re: Finance on car from previous owner

not been able to talk to her much, but it appears the car has been written off, and even more confusing, they had all HPI checks done on it and they came back showing there was nothing outstanding on the car, so from what I understand is that the insurance are refusing to pay out total loss as there is finance outstanding

[labman]

Re: Finance on car from previous owner

not been able to talk to her much, but it appears the car has been written off, and even more confusing, they had all HPI checks done on it and they came back showing there was nothing outstanding on the car, so from what I understand is that the insurance are refusing to pay out total loss as there is finance outstanding

If it was a genuine HPI check, she should be able to claim any sum up to £30000. The insurance company should still pay out to her, then title can be argued. The HPI check makes hercasefor being the first innocent owner very strong.

[emdee1980]

Re: Finance on car from previous owner

as said, not been able to talk to her much as was not at work yesterday and today her son had to be taken to hospital