Purchased car on (not knowing) HP

[judgedread]

Purchased a vehcile 5 months ago from a 'friend' of mine for �12,000, not knowing at the time that this 'friend' had got the car on HP and had not (far from it!) finished paying for it. Finance company has now got in touch with me (I registered the car in my name) and I fear that they may try and 'snatch' the car back. I know now that I should have done a HPI check on the car, but I didn't. I am not involved in the motor trade or have any connections with finace companys. How do I legally stand? I have a written receipt for the car. Thanks in advance.

[Oneeyedvic]

Some 'friend'!!!

The law states that if an 'innocent' purchaser buys the car in good faith, they will have title to the vehicle. (Somehting I disagree with). However, since you know him, you may not be classed as an innocent purchaser, and the finance company may have grounds to suspect that you are involved in fraud.

Does your receipt say anything about the car being clear of finance etc?

Is �12,000 a fair price for the car.....and can you prove by any other means that this is how much you paid.....eg a bank statement showing a withdrawel of that amount at the time?

If you don't mind me asking, how old are you, is this the most expensive car you have ever bought, and have you ever bought privately before?

[Jules001]

Sorry to have to tel you this but I used to be a legal secretary and we once dealt with a case where someone had bought a car without knowing that there was still outstanding HP finance on it. The car still belonged to the Finance Company and our client was left without car or money paid for the car .

[Oneeyedvic]

Okay, I work in the finance industry - the majority of my work is hp and leasing vehicles. As I stated earlier, if you are indeed an 'innocent' purchaser, the law is on your side - ie you will not have to give the vehicle back.

If you answer my above questions, I can give you my opinion as to whether you would be classed (in my mind) as an innocent purchaser.

I would suggest that in Jules001's case, either the client was not an innocent purchaser or the law firm was cr@p.

try typing "innocent purchaser" and "hire purchase" into google, and you will understand what I mean, or follow his link:

http://www.warwickshire.gov.uk/corporate/FAQDb.nsf/By+De partment/DC9AB9B464DF37DF80256DE2005F50CD

[Sludge]

Jules001 is right and Oneeyedvic is wrong. Under a normal HP agreement the vehicle belongs to the finance company. Not only are they entitled to the return of the vehicle but you cannot drive it because if an insurance company new the true facts they would not insure it. You should (a) either voluntarily return the vehicle or come to a financial arrangement for purchase with the owners (b) instruct solicitors to issue immediate proceedings against your friend for the recovery of the �12000 + interest + costs + damages (c) inform the DVLA of the situation, and (d) report the matter to the police (criminal and civil proceedings can run concurrently with each other).  

[Sludge]

"knew" !!.

[Oneeyedvic]

First of all, as I said I work in the finance industry. I have had experience of this type of deal several times.

Secondly, I hate being called wrong from someone who obviously has no idea! Read the Hire Purchase Act and then feel free to comment!

Thirdly, if you do not beleive my above information, maybe you will beleive Oxfordshie Trading Standards - or maybe they are wrong as well - we all bow to Sludge's superior information!

http://www.oxon-tss.org.uk/templates/rights/answer.cfm/3/84

 

Sludge - I suggest if you have no clue about Hire Purchase regulations, you do not bother talking about it!

[Hgrove]

Oneeyedvic I was very interested to read the information you published here, thank you for doing that.

[Sludge]

Everyone buying a car privately for use on public roads takes on a general duty of care to ensure that the title is clear in order that it can be properly insured and run legally. In this case Jud recklessly and knowingly admits to not doing so. There may be 2 reasons (1) greed - Jud may have been offered a vehicle obviously worth �20,000 for �12,000 and decided to take a chance and has now come unstuck, or (2) swindle - perhaps the receipt that Jud admits to having is false and he and his friend together embarked upon a plan to steal from the HP company and it is this that has come unstuck. Either way he is hoping that someone on Answerbank will come up with a wheeze to save him.

The vehicle belongs to the HP company, and Jud may ultimately think himself fortunate if he does not end up as a guest of Her Majesty. 

[Oneeyedvic]

Sludge -" everyone buying a car has a general duty of care....." - really - where is this written down? Obviously an act of parliament that missed me by.....or is this something you have just made up?

"Jud recklessly and knowingly admits not doing so"......okay, try reading the question again.....the only remark Jud makes is "i know now......" - this to me means he/she now knows......ie didn't know at the time....

So apparently - you think he/she is guilty when not knowing any of the truth of the matter - look at my first answer - I have tried to ask the questions that are relevant and can then give a full opinion - I have reposted since as prats like yourself have insisted on giving false / misleading information.

You have said in a previous answer to a question that you are a "specialist in UK and International Contract and Land Law" - If you make snap judgements about a case and think someone is guilty when they ask a valid question, I not only question your ethics, I question as to whether or not you are in fact qualified!

[Hgrove]

Nobody is obliged to run an ownership check on a car when they buy it.  It may be a jolly good idea, but it is not compulsory to pay the AA, or whoever, �50 or so to check the seller has clear title.  I did not do one when I bought my car - I had intended to, but when it came to it, in my excitement (as I had finally passed my driving test after many years of trying) I forgot all about it.  Everything was fine in my case.

[judgedread]

okay..I purchased the car approx 5 - 6 months ago. The 'friend' (more of a business acquaintance) whom I'd known for approx 4 years insisted on cash for this sale. I paid about �7000 in cash and the remainder was a 'bank transfer' to his brother, (of which I have proof). The 'friend' has since 'done a bunk' leaving not just me with this problem but as far as I'm aware, other creditors as well. (He owned his own company). He himself had had this car for about 14 months before he sold it to me...one of the reasons perhaps I didn't question him. ...Age (Oneeyedvic questions) 52...Bought privately before?...many times through local Ads and once at an auction. It is not the most expensive car that I have owned.

[Hgrove]

The general rule as far as I know is that you cannot sell something you do not own - the "Nemo dat" rule (nemo dat quod non habet).  For ex:  if you own a 80 year lease on a flat, you cannot sell a 90 year lease, or the freehold...  Likewise:  if you buy a car on HP, the HP company own the car, you do not have legal title, so you can't "sell" title to that car.  However - I had not heard before of the law that Oneeyedvic wrote about and was very interested to read it.  Often the law is really about apportioning loss.  Here, we have a "rogue" who's cashed the money and done a runner, leaving yourself and the HP company, both with a good argument why they should not lose out.  The law basically has to decide where the loss should lie:  with you or with the HP company?  It seems to me that a law whereby the innocent purchaser acquires title can only mean that Parliament has seen fit to let the loss lie with the HP company, perhaps on the grounds that a company can afford it better than a private individual. (This is not so outrageous, just think of employer's vicarious liability for ex.).  As far as I know the Courts are not naive and if you are doing a scam, they'll soon suss you out;  whereas, if you are an innocent purchaser, you should not be afraid, on the basis of the Oxfordshire Trading Standards website.  A word of warning though, if the HP company can make an argument that your "friend" had stolen the car, then title has not passed to you at any time.  Your chance lies in showing that it was an HP agreement and you are an innocent purchaser;  I think you need detailed legal advice, these things can turn on a word said or some really minor, innocent looking detail.

[Oneeyedvic]

First of all you need to find out if it was indeed a HP agreement. If it were a lease or contract hire or similar (and it would still be registered on HPI) this is not the same thing and you would have no protection under the Hire Purchase Act.

Personally, I think that at 52, you may be a bit naive to have not done an HPI check, but that is easy for me to say being in the industry. As Hgrove suggests, the courts (if it gets there) will be sensible enough to realise if you were part of a conspiracy to commit fraud (just hope to God you don't have someone like Sludge as a judge).

Bear in mind that some companies will also register loans with HPI despite the fact that they have no interest in the vehicle - it is there purely as an attempt to try and stop this sort of thing happening.

On the basis that you are not trying to commit fraud, the car was financed on a HP agreement, you paid a 'fair' price for the vehicle etc, I would feel that you have a fair chance of being classed as an 'innocent puchaser'.

You really do need to at the very least go to your local Citizens Advice Bureau, and preferably go to a solicitor. Do not give up the car. If repossession agents turn up, they will need court papers to serve on you. Do not give them keys etc. Call the police if needs be. Unless their paperwork is in order, they cannot get police support.

The argument about theft would be invalid Hgrove - the only potential way (And I use as my source CCTA magazines - Consumer Credit Trade Association) is if the vehicle was financed illegally - eg by id theft. I forget the case details but it was in the middle of last year.

Hope this helps

[Sludge]

This matter goes no further than that everyone buying a car privately for use on public roads takes on a duty of care to ensure that the title is clear so that it can be properly insured and run legally. To not do so is irresponsible, reckless and clearly the action of a person deliberately not caring who owns the vehicle and quite contemptuous of the persons he may kill or injure. This brainless preposterous behaviour is obviously that of an abberant mind. The irrationality is clear and there is absolutely nothing, nothing whatsoever, that can stand in mitigation for such insane and lunatic behaviour.

[Oneeyedvic]

"This matter goes no further than that everyone buying a car privately for use on public roads takes on a duty of care to ensure that the title is clear so that it can be properly insured and run legally"...........this is your opinion and your opinion only. It has no legal basis.

I would also point out that insurance has no bearing on this at all no matter what you say.

"To not do so is irresponsible, reckless and clearly the action of a person deliberately not caring who owns the vehicle and quite contemptuous of the persons he may kill or injure" - wow does this mean that everyone who doesn't do an HPI case is trying to kill poeple? you have lost me there!

"The irrationality is clear and there is absolutely nothing, nothing whatsoever, that can stand in mitigation for such insane and lunatic behaviour" - do I have to repeat myslef - the Hire Purchase Act (that is an act of parliament) offers protection for innocent purchasers. (this is mitigation)

I think you have really outdone yourslef this time Sludge.........you firstly make erroneous claims, you then doubt the validity of someone who knows what they are talking about, you are then proved to be wrong so you can do no more than just insult people..

congratulations

[Hgrove]

Oh hum.  Sludge again.  How tedious.  There is no obligation to run an ownership check on a car before purchasing it.  None.  It may be naive not to do one, but that's as far as it goes.  (It is also a money spinner for the AA.)  If irrational behaviour were a crime we would have got rid of Sludge by now.  A driver owes a general duty of care to other road users not to run them over, that's all.  By the way... Sale of Goods Act 1979, Sec. 12 provides that in a contract for sale there is an implied term that the seller has the right (title) to sell the goods...

[Hgrove]

Oneeydvic, what I wrote about the situation if the car were stolen was based on the following paragraph which was in the Oxfordshire Trading Standards website: "stolen cars (in common with other stolen goods) will always remain the property of the person from whom they were stolen. If you are unfortunate enough to buy a stolen car, then the original owner will be entitled to have it back."

[Oneeyedvic]

Sorry Hgrove - you are correct - in the case of stolen goods apply the Nameo Dat rule - however a finance company cannot claim it is stolen if the vehicle is on HP and subsequantly sold.

What I was referring to is that due to a court ruling last year, if the HP agreement was taken out fraudulently, the HP agreement is invalid and the new purchaser has no protection under the Hire Purchase Act. The finance company can reclaim the vehicle and the consumer is left out of pocket.

Interestingly, I asked a very good friend of mine last night (age 54) if she would have done an HPI check - she said no she wouldn't have........... Murdering b1tch!

 

The law is generally a ass, I can't say I agree with these laws (as stated in my first post) - I really think that HPI should be a free service and people should check these out first. But then I also don't think people should be able to get a loan to buy a car - just HP.

HP is a minefield - you have 1/2 and 1/3 rules, (which refer to handing the car back and when you can repossess the car). Pro Forma invoices do not pass title. Lots of regulations and a complete nightmare.