Finance Co Trying To Take Car-Previous Owner's Debt!

[bh486]

Hi.
I bought a used car in December 2009. It was HPI'd both by the supplying dealer when he bought it and again by me when I bought it.

A couple of weeks ago I had a letter from Lombard stating that the car was subject of a finance agreement and that they wanted to come and take it back.

Their debtor is the previous registered keeper who sold the car to the dealer I bought it from.

I have a had an off the record chat with someone senior at HPI who has confirmed that the chassis number for my car has NEVER, EVER appeared on the finance register in its life and it does not now.

The conclusion we have come to is that the reason why the car has not appeared on the finance register is because the previous owner took out an "agreed sum loan" using the car.

Could someone please confirm a couple of things for me on the presumption that it is indeed an "Agreed Sum Loan".

1. That the finance company would not supply HPI with an "interest" marker as it remains the debtor's property to keep/sell/do what they want with?

2. That if "1" is correct, if the debtor sold the car and then defaulted on the loan, that the finance company cannot take the car away from the new owner as it is not their asset as they are currently claiming it is.

If 1 and 2 are not the case, this means that ANY car bought second hand could be subject to a loan agreement, the purchaser wouldn't know as the finance company's interest cannot legally be shown on the HPI register, and therefore anyone owning a second hand car is potentially at risk of having it snatched back through no fault of their own and in spite of carrying out due-dilligence correctly.

Any help really appreciated. Thank you.

[Caspar]

Re: Finance Co Trying To Take Car-Previous Owner's Debt!

Hi.
I bought a used car in December 2009. It was HPI'd both by the supplying dealer when he bought it and again by me when I bought it.

A couple of weeks ago I had a letter from Lombard stating that the car was subject of a finance agreement and that they wanted to come and take it back.

Their debtor is the previous registered keeper who sold the car to the dealer I bought it from.

http://www.theanswerbank.co.uk/Motor...ion907454.html



I have a had an off the record chat with someone senior at HPI who has confirmed that the chassis number for my car has NEVER, EVER appeared on the finance register in its life and it does not now.

The conclusion we have come to is that the reason why the car has not appeared on the finance register is because the previous owner took out an "agreed sum loan" using the car.

Could someone please confirm a couple of things for me on the presumption that it is indeed an "Agreed Sum Loan".

1. That the finance company would not supply HPI with an "interest" marker as it remains the debtor's property to keep/sell/do what they want with?

2. That if "1" is correct, if the debtor sold the car and then defaulted on the loan, that the finance company cannot take the car away from the new owner as it is not their asset as they are currently claiming it is.

These are the bits that are puzzling me. In the case (same as yours I think) I've given a link to above, the car clearly had not been HPi'd by the dealer and it showed up when the new "owner" did an HPI credit.

If 1 and 2 are not the case, this means that ANY car bought second hand could be subject to a loan agreement, the purchaser wouldn't know as the finance company's interest cannot legally be shown on the HPI register, and therefore anyone owning a second hand car is potentially at risk of having it snatched back through no fault of their own and in spite of carrying out due-dilligence correctly.

Any help really appreciated. Thank you

Off to do some more hunting around. BRB!

[Caspar]

Re: Finance Co Trying To Take Car-Previous Owner's Debt!

This is what I would think is your best way forward assuming you did everything mentioned below.:beagle:

http://www.hpicheck.com/furniture/guarantee.html

HPI Guarantee

At HPI, we work hard to ensure that the data we receive and manage is the best available but no data source is perfect. That's why your HPI vehicle check includes the HPI Guarantee. Subject to the HPI Guarantee Terms & Conditions, the HPI Guarantee provides up to £30,000(£15,000 for written off vehicles) reimbursement of financial loss you suffer arising from inaccurate or incomplete information we supply to you as part of the HPI Check. As you'd expect from HPI, the cover is the most comprehensive available today.

Here is a summary of the main conditions:

• You need to carry out the HPI Check yourself, before you buy the vehicle - the Guarantee is not transferable.
• You must supply us with the Vehicle Registration Mark (VRM) and the Vehicle Identification Number (VIN) to be eligible for maximum cover available under the HPI Guarantee. The HPI Guarantee will not apply if we advise you that the VRM does not match the VIN, so make sure the information you supply is accurate (pay particular attention to '5's and 'S's, '2's and 'Z's).
• Before you buy the vehicle, you must make sure that all vehicle details provided by HPI match both the vehicle and its accompanying paperwork, and notify us of any discrepancies. As a minimum, you must obtain and check the V5 registration document with us, using our Document Check facility, prior to purchase.
• You must check that all the VIN markings on the vehicle match each other and the corresponding V5 registration document.
• You must keep and produce to us on request a written receipt for your purchase, signed by the seller, containing the key information needed to identify the seller and the vehicle (e.g. the seller's name and address, the identity and mileage of the vehicle purchased, the date of purchase and the amount you paid).
• If you are buying the vehicle privately, you must buy it from the keeper, at the address shown on the V5. You must also check the identity of the seller.
• You must buy the vehicle in a reasonably prudent manner (for example - claims will not be considered if you have paid 30% below the retail market value).
• The cover provided is based on the car's value. In the case where HPI provides incorrect data affecting vehicle title (such as theft or outstanding finance), the HPI Guarantee will cover up to £30,000, either in compensation or the costs needed to obtain good title to the vehicle (at HPI's discretion). In the case where HPI provides incorrect data affecting the vehicle's condition, the HPI Guarantee will cover up to £15,000 or 50% of the market value of the car, whichever is the lower.
• The HPI Guarantee does not cover the vehicle's descriptive information (including import status), mileage, value, V5 registration document checks, or if the loss has arisen as a result of a fraudulent transaction.
• The HPI Guarantee is valid for two years from the date of the check.
• The vehicle must be bought and registered in mainland Britain (i.e. it excludes Northern Ireland). If it has been imported, HPI does not guarantee its history prior to arrival in this country.
• If you make a claim under the HPI Guarantee, we reserve the right to inspect the vehicle and to make the final decision as to its condition and value.

You are advised to consult the full HPI Guarantee Terms & Conditions for full details of the cover provided.

At a quick glance I can't see anything that would exempt you from claiming.

Good luck and hope this helps,

David

[bh486]

Re: Finance Co Trying To Take Car-Previous Owner's Debt!

Hi.
Could someone please re-read my OP and answer the questions I have asked? I would really appreciate it.

The car has never been and is not now recorded on HPI under either the chassis or registration number.

This is not a matter for HPI. I am asking whether under the specific conditions applied in my OP, a finance company can take a car from the new owner.

The correct answer will be a point-of-law rather than just opinion.

Thanks in advance to anyone with the legal knowledge able to assist.

This is a very serious and present problem to me in which I am risking tens of thousands of pounds.

[Caspar]

Re: Finance Co Trying To Take Car-Previous Owner's Debt!

This is a very serious and present problem to me in which I am risking tens of thousands of pounds.

Hence my attempts to show that you may well have protection if what you say you have done is the case!

In legal terms as I understand them, yes the finance company can come and reclaim the car. Hope somebody can prove me wrong for your sake, though is there a reason you're trying to avoid the HPI guarantee? If so what is it, if not then why not look at that route?

The Nemo Dat rule kicks in as well, but things are not clear cut so I doubt anyone can give you the definitive answer you want. It would be up to the courts! Also can you clarify please when you bought the car off the dealer, did the dealer own it or not? If he did his name will appear as the last registered keeper on the V5 (though I realise this does not prove legal ownership) - it would be useful to know if it was registered in his name before yours.

[Amy]

Re: Finance Co Trying To Take Car-Previous Owner's Debt!

I believe this to be a Personal Contract Purchase (PCP) which is similar to an HP agreement, but results in a balloon payment at the end of the term, but essentially it is still finance.

If you are the first innocent purchaser of the vehicle, which you would certainly appear to be, then no, the finance company cannot repossess your vehicle.

Have a read of post #2 here Vehicle Ownership - Legal Beagles Consumer Forum and although it mentions HP agreements, as I have said above, I believe yours is still a finance agreement and they are under the umbrella of the Consumer Credit Act 1974.

[Caspar]

Re: Finance Co Trying To Take Car-Previous Owner's Debt!

I may understand your predicament a bit better now. IF you are the same person as is posting a virtually identical thread on CAG then you say on there you had a friend check it as well as the dealer, not you. This would of course invalidate any HPI guarantee.

The dealer should still have a genuine issue with HPI though so why cannot it be taken back through him and why are the talks "off the record." Surely they need to be very much on the record.

Something just doesn't quite add up to me here. Maybe somebody else will see something I'm missing.

IF HOWEVER, and this is the really important bit, you can establish that YOU are the FIRST innocent party to have bought the car (and not the dealer) then you have no need to worry as my understanding is it cannot then be removed from you.

[Caspar]

Re: Finance Co Trying To Take Car-Previous Owner's Debt!

I believe this to be a Personal Contract Purchase (PCP) which is similar to an HP agreement, but results in a balloon payment at the end of the term, but essentially it is still finance.

If you are the first innocent purchaser of the vehicle, which you would certainly appear to be, then no, the finance company cannot repossess your vehicle.

Have a read of post #2 here Vehicle Ownership - Legal Beagles Consumer Forum and although it mentions HP agreements, as I have said above, I believe yours is still a finance agreement and they are under the umbrella of the Consumer Credit Act 1974.

Amy,

I disagree I think. The OP said the dealer bought the car first, so he would NOT be the first innocent purchaser, hence my question about the V5.

david

[bh486]

Re: Finance Co Trying To Take Car-Previous Owner's Debt!

I appreciate your posts, but you are missing some points despite my having already explained them.

This is a PERSONAL LOAN. It is NOT a Hire Purchase agreement where the bank owns or has title to the car as an asset. The debtor is personally liable.

It is called an Agreed Sum Loan. It is made to an individual but the money is loaned against the VALUE of a car.

HOWEVER, the car is not considered as collateral and as such cannot be repossessed by the finance company from the debtor.

As such the car does not appear on the finance register.

As such it is not possible to take issue with HPI for not presenting information they wouldn't be given in the first place as it doesn't apply to this type of loan.

I asked a question - I would be grateful for the LEGALLY CORRECT answer ONLY from someone who knows, as opposed to well meaning, but nonetheless supposition or opinion from those who can't.

I don't intend to be rude, but I think what I have asked is perfectly clear and the response will be a simple one for someone with specific knowledge of this area of the law.

So that question once again:

I am in receipt of a letter from the previous owner's creditor stating what appears to be a robust argument for possession of my car.
However, the car is subject to an "Agreed Sum Loan" borrowed by the previous owner using the value of the car in order to arrive at the figure of the loan.
The car is however not collateral under the terms of such an agreement....at least not when the car is owned by the debtor.
They couldn't take it off him when he owned it if he defaulted without first getting a court order to take it in the same way they would to take any other personal possession.

Whilst on the surface it appears that I have already answered my own question, I am not prepared to simply dismiss a letter from one of the largest finance companies claiming the car to be theirs and that they can take it.
It would seem strange that such a company would put themselves in a position where they could end up being accused of an attempt to obtain goods or monies through deception when it appears that they have no option but to only pursue the debtor personally for assets he actually owns today.

Please, again, only answers from those who properly know this area of the law - Not guesses or supposition.

Thank you again for the well meaning but inaccurate attempts.

[bh486]

Re: Finance Co Trying To Take Car-Previous Owner's Debt!

Hi Amy, I am not sure that this type of "Fixed Sum Agreement" or "Agreed Sum Loan" is regulated by the CCA. Do you know?

That thread you pointed me to would be helpful if it is!
------------------------------- merged -------------------------------
Also Amy, is there any chance this thread can be moved to "Car Finance"? I've obviously misplaced it by putting it here!

[Amy]

Re: Finance Co Trying To Take Car-Previous Owner's Debt!

The thread I mentioned is in blue, just click on it.

In the meantime, PCP (which is what I believe is the agreement we have here) was designed specifically to be a personal contract for private individuals. A PCP plan is classed as a conditional sale agreement that offers protection under the Consumer Credit Act 1974 and the Financial Services Regulations 2004.

It is the Consumer Credit Act 1974 which states that the first "innocent purchaser" of the vehicle gets good title and by innocent purchaser, the law means someone who did not know and who could not reasonably have been expected to know, about the outstanding finance agreement.

So I think Lombard are trying to pull the wool over your eyes.

[Caspar]

Re: Finance Co Trying To Take Car-Previous Owner's Debt!

The thread I mentioned is in blue, just click on it.

In the meantime, PCP (which is what I believe is the agreement we have here) was designed specifically to be a personal contract for private individuals. A PCP plan is classed as a conditional sale agreement that offers protection under the Consumer Credit Act 1974 and the Financial Services Regulations 2004.

It is the Consumer Credit Act 1974 which states that the first "innocent purchaser" of the vehicle gets good title and by innocent purchaser, the law means someone who did not know and who could not reasonably have been expected to know, about the outstanding finance agreement.

So I think Lombard are trying to pull the wool over your eyes.

Me too Amy, but what if he is not the first innocent purchaser? Would that change things? The OP states the dealer bought the vehicle from the person who owes money on it. OP then purchased from dealer which makes him the 2nd innocent purchaser if it was registered by the dealer. As I said, hence my question about the V5.

[Amy]

Re: Finance Co Trying To Take Car-Previous Owner's Debt!

It is not the dealer who wants the car back, it's Lombard who want it back.

[Caspar]

Re: Finance Co Trying To Take Car-Previous Owner's Debt!

OP - if by Agreed Sum Loan you mean Fixed Sum Loan the answer definitively is yes, it is regulated by the CCA according to His Honour Judge Tetlow (Brooks vs Northern Rock 2010.


If you're sure it is an Agreed Sum Loan then I can't find any reference to such a sort of loan existing.


------------------------------------------------------------------------------------------------------------------This poster takes no responsibilities for any inaccuracies in his postings or advice.

[bh486]

Re: Finance Co Trying To Take Car-Previous Owner's Debt!

Hi Amy.
I was saying I had read the thread already, thank you for the link. I was stating that what was in the listing would apply if the agreement taken out by the debtor were regulated.

If the company is indeed knowlingly "pulling the wool", surely this is rather dangerous and commercially stupid - As I say it could surely be construed by a court as an attempt to commit a fraud. There are some who might given in and pay/hand the car over.
Given the time this has consumed and the stress it has caused I would be mindful to sue them.