thinking of a iva but have a car hp agreement

[michael_b]

thinking of a iva but have a car hp agreement have had to sell car trying to keep up the payments foolishly what is the position on this

[MelanieGiles]

Do you mean that you have sold the car and not informed the HP company?

[chardonnay]

Hi Michael-b and welcome to the forum.
I'm not sure I'm clear on your post - as Melanie says do you mean you have sold the car which was on HP? If yes did you manage to settle the HP agreement with the proceeds? If you have then you should be ok, if not I would think you may have a problem as the HP debt is still out-standing.
If you post more details the forum members will be able to offer help, advice and support.[:)]
Best wishes,
Chardonnay

[Adam Davies]

Hi
If the car was on HP and you have sold it then the finance company can still claim the car back from the person that you sold it to.You will then have the shortfall from the finance company and the person that you sold the car to will have a claim against you.
Are you sure that it was a HP agreement as many car loans are personal lonas these days ?
Regards

[liberta]

Hi. Not sure if I agree with Andy.

It is my understanding that if a car which is subject to a HP agreement is sold to a private individual who pays a fair price in good faith then he gets good title to the vehicle. The situation is different however if the car is sold to a dealer, who would not get good title and the HP company could reclaim the vehicle as Andy suggests.

I would check that it is actually a HP agreement, you will need to check the actual loan agreement. Generally they are headed with the words, Conditional Sale Agreement or Hire Purchase Agreement. If the agreement says neither of these, then check the terms and conditions to see if it talks about ownership of the vehicle and the HP company's right to reposess it if the loan falls into default. As Andy says, more often than not the car loan is actually written as a personal loan.

If the car is subject to a HP, technically you have sold a car which you do not own, and the HP company could take action against you.

However I have dealt with quite a few clients who have innocently sold a car which was subject to a HP agreement and no action was taken against them. The now unsecured debt was included in their IVAs and the HP companies, though not best pleased, were bound by the arrangements.

Discuss the matter in full with the IP you choose to use to act as your Nominee and give him or her a copy of the loan agreement. Your chosen Nominee will also want details of when the car was sold, how much you got for it, the value of the car at the time of the sale and what you did with the proceeds. She or he will be able to advise you properly. The main thing is to admit that you have made a mistake.

[David Mond]

Interesting point Liz - but how can someone sell something that is not theirs to sell - even if a purchaser bought it in good faith. The old caveat "buyer beware" comes to mind. Any buyer is capable of checking out whether a vehicle is on HP - so any other views out there????

[MelanieGiles]

Elizabeth is right - the purchaser of a second hand car from a private individual does get good title to the vehicle, and the finance company would have to sue the seller for any loss. This is not the case if the vehicle was bought from a dealer, and it is against the law to sell a vehicle in which someone else has an interest - ie the finance company.

[Reviva UK]

My understanding is that:-

1. The HP company are perfectly entitled to reclaim the goods , and any shortfall from yourself.

2. The purchaser of the car would then need to take action against you for funds paid.

3. Believe it to be a criminal problem if one sells goods covered under HP and where no attempt to repay part or all of the funds to the HP company.


If the sale funds did not clear all the HP then I understand that the HP company would probably pass title provided that all the funds from sale were paid to them . Any shortfall would then become unsecured.

legally if they have title ( the HP company ) I do not understand why they would simply give their asset away.

However you should carefull read your contract because the agreement may well be a fixed term loan agreement which is latin for unsecured.

[liberta]

Please see link to Hire Purchase Act - just a short pan down to the relevant section.

http://www.opsi.gov.uk/RevisedStatutes/ ... 40053_en_1

[kallis3]

I am inclined to agree with David (although stand ready to be shot down as I am not an expert in this!) I was under the impression that a vehicle was not yours until the final payment had been made under and HP agreement.

I would think that the law with vehicles sold whilst still on an HP agreement would be the same as that for stolen vehicles i.e. someone buys a stolen vehicle 'in good faith' and pays a reasonable price for it, the vehicle is still forfeit as it is the owned by the insurance company. They will have paid out to the owner of the vehicle.

A dealer should do an HPI check anyway before agreeing to buy a car, and a private individual would be advised to do the same before handing over good money.

[MelanieGiles]

Heavy reading for a Sunday morning - but as I said earlier I agree with you.

[David Mond]

Well done Liz - you are right (as Melanie confirmed) but what turgid reading for a Sunday anyway.

[kallis3]

I stand corrected.

[Storm]

Depending on which finance company is involved the innocent purchaser may well get a visit from an agent firstly to establish is they had any knowledge that the vehicle was on finance, that they paid market price ie nothing in the transaction made them believe the transaction 'smelled' or that they are associated in any way with the seller.

The collector will also try and get possession. The vast majority of consumers just hand over the keys !!

[Adam Davies]

Hi
An interesting case.
Can someone sum up exactly where the person stands once they have sold the vehicle on HP to a third party ?
Regards