Sellers and Hire Purchase Grrrr

[Boris]

Right rant time
I've just been down to a chaps house with my son to look at a car he was hoping to buy. The car seemed straight enough and the price was right and speaking to the owner (who has had the car for 18 months) everything lined up. All paper work fitted his story and I asked him if there was any HP or other loan secured on the car and he said there had been but he had cleared it off. So I agree to buy on the provisio that it came back HPI clear for finance / theft etc and he agreed. I did ask him again if I was going to find out anything he should be telling me no and he insisted everything was in order.

So we get home and HPI the car and it turns out it has HP on it. No surprises there as he had just cleared it off but there was a contact number and loan reference for the HP company and so I called the seller and told him I would phone the HP company in the morning and just double check that as far as they were concerned the debt had been repaid. Only then did he admit that he hadn't actually cleared the loan yet and that he was going to use the money I gave him for the sale to clear the debt. He even said I could go with him to the bank. Pay it into his account and then go home with him and he would call the HO company and clear the outstanding finance while I listened in. This sounds fraught with danger to me as I have no way in ensuring he actually clears the debt so.

So based on the premise that he has lied to me once already what are peoples thoughts. The car does seem genuine and my gut feeling the seller is also and is caught in a bit of a chicken and egg situation with money but I still don't trust him enough to bung him the best part of four grand and just hope he gives it to the HP company as he is clearly in some sort of financial trouble.

I'm going to call the HP company and see what they recommend as this situation must have arisen before but has anyone any experience of such a situation and can come up with a safe way to conclude the sale? The car is what the lad wands and the price is right so if a safe way could be found it would be worth continuing.

 

[outrunner]

If it were me I would consult the HP company for advice. Selling a vehicle that is still on HP is an offence so I wonder if the guy knows this?


Andy.

 

[Ian Porter]

Can you settle the finance on his behalf and pay him the difference?

 

[Loggy]

Steer clear would be my path... There are thousands of cars around for sale. You just need to get the right one. Having already lied to you why would you want to go any further?

The last thing you want is to loose the car AND your money!

 

[Lutin]

If it were me I would consult the HP company for advice. Selling a vehicle that is still on HP is an offence so I wonder if the guy knows this?


Andy.

I thought it was an offence to sell a vehicle on HP too. Is it different if you are part ex-ing though?

I wouldn't have anything to do with this personally. The guy might be genuine, but I wouldn't want to take the risk.

 

[Boris]

Quick update

I had a call with the HP company this morning (the HPI check gave me the contact details and case ID) and I spoke to the account manager whose account this was. She was aware the seller was planning to sell the car and said this whole scenario crops up regularly. Her advice was not to give him the money in the hope of clearing off the debt but rather to get the three of us together on the phone where I could then clear off the outstanding HP directly (at which point she would immediately release the loan) and then I would give him the balance in cash. That way there was no more risk to me than had I just handed him (or any other seller) the cash for a car that didn't have any loan associated with it. Although she couldn't go into any details I asked a fair number of questions about the rest of his story about how long he had the car etc and it seems the rest of the story all lines up with the V5 / home addresses etc.

It seems like a sensible solution and the car is exactly what he is after so I think we will go ahead.

 

[Mpj]

are you buying it in Scotland or England? if the latter then English law treats payment of a debt on behalf of a third party as a gift and he will have no obligation to pay you back.

GET IT IN WRITING FROM THE SELLER that he will regard you as having paid £3k to him and why

 

[Boris]

are you buying it in Scotland or England? if the latter then English law treats payment of a debt on behalf of a third party as a gift and he will have no obligation to pay you back.

GET IT IN WRITING FROM THE SELLER that he will regard you as having paid £3k to him and why

Thanks for that.
In the end I bought the car. I had a threeway call with the HP company and I cleared the debt directly for the seller (the HP company sent me a pdf document by email confirming they have no further interest in the car) and then bought the car of him for the difference. I have everything documented and receipted by the seller confirming the two separate transactions that have been made and that they constitute full and complete payment for the car.

It seems this is a pretty common occurrence and it was the HP company that confirmed this is the usual way of clearing debts when sellers are caught in a cash shortage.

Thanks for all the help. As for the car it's a cracker and he has ended up getting it for a cracking price.

 

[Mpj]

Glad your son has a new car and you sorted everything out.

 

[Lutin]

Well, everyone's happy.

So much for my pessimism.