car shock

[milky1965]

bought a car from a company, putting my other car in part-ex (�3000). owed �4000. new car �6000, plus �1000 shortfall for old car. new finance for �7000. car company supposed to pay old car off, but gone bust and have paid nothing, not even the extra �1000. i have been told i am liable to pay for both loans, even though i don't have old car. any info welcome.

[les saisies]

The correct legal procedure to follow is for you to settle the outstanding finance on your old car before you release it to the dealer in part-exchange. Your new finance will then cover your new car on whatever basis you have agreed.

Unfortunately you are liable for both loans as it is ultimately your responsibility to repay the loan.

I think that you will have to contact the company receivers and join the list of creditors who may get a percentage payout in due course.

[spaced]

les saisies is right.

also, the dealer should NOT have accepted your part exchange, without a letter from the company that you were paying for the car to, stating that their is "no Interest" (no outstanding finance) owed on the vehicle. If he had advised you that "sorry sir but without this letter we cant accept your part ex, as technically the loan company own your vehicle" then this maybe would have signalled to you that you sould have settled the finance first. You can not part ex/sell a car that does not belong to you.

unfortunately the loans now rest with you. I hope everything sorts itself out for you, its a real shame that these things happen to honest people.