Purchasing a new car and being charged for a Legal Indemnity

[Penfolo]

Hi there, I've put a deposit down on a car from what seems a reputable car garage that has over 150 vehicles and appeared to me to be genuine throughout the agreement of the sale.

The car was advertised at £3000 but the agreed price was actually £3450 which included a £300 12 month warranty and service plan (including an MOT and service prior to purchase) and £150 for a legal indemnity. This is the bit that I am unsure of.

When I questioned the legal indemnity the sales guy explained that it was to protect both them and me from having to pay out if there were any existing finance that hadn't shown up on an HPI check, no matter how far down the line. This seems reasonable but I was under the impression that an HPI check would give the purchaser up to £30,000 if it had missed something?

If I'm incorrect and this insurance is commonplace (if not commonplace for the customer to have to pay it) then the other thing that worries me is that there is no policy document or explanation of the cover available, I am simply expected to be happy with its presence in the bill as a £150 charge and if there is any issue this will be how I prove that I have it.

As you can probably tell I'm a little confused by the whole thing and not sure whether I should or shouldn't be paying for it. Any help or advice you can give would be greatly appreciated!

Thanks in advance,

Penfolo

[ostell]

Re: Purchasing a new car and being charged for a Legal Indemnity

If there is outstanding HP on the car and the garage sold you the car then when it was repossessed you would claim back all your money from the garage. This money is to cover the garage in case they have cocked up.

Get the details of the warranty being provided for the £300. there could be so many disclaimers in there that it could be worthless. See how much a used car warranty would cost you from another insurer. Don't forget they are liable if there are any serious defects in the car.

[des8]

Re: Purchasing a new car and being charged for a Legal Indemnity

If you are buying from a dealership/garage this "indemnity" is a con.
Several chains try it on, suggesting it is an optional extra.
Any seller has to provide a car with good title.
If it is a private sale and outstanding HP rears its head you could lose the car, and it might not be worth pursuing the seller. In that case the indemnity might be worth while.
If it is sold by a dealer, he will be responsible if it turns out he does not have good title.
These checks are part and parcel of running a dealership. The checks are done up front by them in order for them to safely sell on the vehicle. It is just like any other cost in preparing the vehicle for sale. They then set the advertised price to cover their costs and make a margin