What happens if there is outstanding finance on a car you have bought
If you have recently bought a car with outstanding finance on it, you could end up getting into a lot of trouble with money, the law, and you could potentially even lose your new car. That is why it is so important to act fast – as soon as you learn that there is unpaid finance on it you should contact a solicitor for legal advice.
Outstanding finance: what is it?
Some people choose to buy a car on finance, which means that they pay monthly for the car and spread the cost of the purchase. When someone chooses to do so, they do not legally own the car until the final payment is made to the finance company. Before they take the car away they will sign a contract called a Hire Purchase Agreement, which will outline the date of purchase and the end date of the contract. A Hire Purchase Agreement allows the person purchasing the vehicle to pay little or no deposit at the beginning, and then pay a fixed monthly fee.
If a vehicle has outstanding finance on it, this means that the final payment of the Hire Purchase Agreement has not been made to the finance company, and the person who took out the agreement does not technically own it. Because they do not own it, they are not legally allowed to sell it. So if you are sold a car with outstanding finance, you do not legally own the car even if you have been given documentation which states that you do.
How can you tell if a vehicle has outstanding finance?
Although you won’t be able to tell if a vehicle has outstanding finance on it by looking at it, checking online is really quite easy. You can easily check online by searching for ‘outstanding finance check’ or ‘HPI check’. This check will come back with a report which will tell you if there is outstanding finance on the vehicle you have bought.
What happens if you just leave it?
It might be tempting to simply just leave it, even if you know that your recently purchased vehicle has outstanding finance on it. However, it is not a good idea to do this. Avoiding the problem will only make the situation, as any attempt to hide the vehicle or obstruct the finance company will get you in serious trouble, even though the debt was not yours to begin with. For example, the finance company might contact the police and report your car as stolen.
What can you do?
If you carry out a HPI check and find that there is outstanding finance on your vehicle, you should urgently contact a solicitor. They will be able to help you make a compensation claim for the payment of the vehicle if it has been repossessed, or make a claim to keep ownership of the vehicle. In order to make a claim you ideally have to hire a solicitor. It is nearly impossible to represent yourself and issue court proceedings without having significant experience and expertise in law.
If you act fast, it is likely that will avoid losing your vehicle and the money you paid for it. After all, the courts will understand that it is not your fault that you have been sold a vehicle with outstanding finance and are inclined to compensate you or allow you to keep the car. It’s always better to be safe than sorry when it comes to outstanding vehicle finance.