What are my Rights now my Vehicle has been Repossessed?

When you unknowingly buy a car from a seller that did not own the vehicle outright, it could lead to vehicle repossession.

A seller would not own a car outright if they had purchased the car with what is called a hire purchase agreement, and therefore they were not allowed to sell it onto you.

Was the Seller the Owner of the Car I Bought?

Where a hire purchase agreement is in place the seller would have been paying monthly instalments for a specified period of time in return for being allowed to drive that car, instead of having paid a lump sum and owning the car outright.

That subsequently means that the finance company owns the car, not the driver, thus preventing the driver to sell the car onwards to another person. As a result, the finance company is in their right to repossess the car.

For our clients that meant the car they purchased was in fact not owned by them, even though they had paid for it. Therefore, even though they did nothing wrong, without taking further legal action they would have been left empty handed.

Did you recently buy a car with outstanding finance left on it, leading to vehicle repossession? We can help!

Vehicle Repossession Because of Outstanding Finance

Why is Outstanding Finance a Problem?

When there is outstanding finance on a car the car is owned by the finance company and the person driving the car is not allowed to sell this car onwards as they do not own it.

When said finance company realises the car is sold to another owner by the driver they had their hire purchase agreement set out with, they will act to either retrieve the vehicle, or the money that was outstanding to pay for the vehicle outright.

That leaves the person buying the car in a pretty unfortunate and uncomfortable position. The finance company doesn’t normally care all that much for the individual’s personal circumstances or the fact they did nothing wrong and will simply report the car as stolen, so it can be seized by police and returned to them.

Such was the case for one of previous clients Mr. K.

Legal Action Against the Finance Company after Vehicle Repossession

Mr. K was quite happy with his purchase of his Mercedes C200 after buying it from a private seller for no less than £7,000.

This was, until the police came to seize the vehicle after it had been reported stolen by finance company MotoNovo Finance.

This came as a complete surprise as Mr. K had thought he had purchased the car legally and that all paperwork had been in order.

As he did not feel he did anything wrong he then tried to explain his predicament to both the police and the finance company. He was even able to prove that he had in fact purchased the vehicle with the help of the receipts.

Even so, unfortunately neither party listened, and Mr. K was left with nothing.

At this stage Mr. K contacted our solicitors to act on his behalf.

Now managing director of AWH Solicitors, Abdul W Hussain, contacted MotoNovo to obtain further information about what had happened, but was met with the same opposition as Mr. K had experienced previously.

According to the finance company Mr. K had been negligent as he had not carried out an HPI check prior to the purchase of the Mercedes.

Not only did the finance company consider Mr. K actions to prove negligence, they also argued that Mr. K paid far too little for the vehicle and should have known there was something not right about the sale.

Mr. Hussain did not let this deter him and after further investigation he issued court proceedings.

Because Mr. K had purchased the vehicle in good faith and was at the time fully unaware of the finance agreement outstanding Mr. Hussain pursued his claim under Section 27 of the Hire Purchase Act 1964.

Have you recently been in a similar situation?

Section 27 of the Hire Purchase Act 1964

S.27 Applies where a motor vehicle has bailed or hired under a hire purchase agreement or has been agreed to be sold under a conditional sale agreement, and, before the property in the vehicle has become vested in the debtor, he disposes of the vehicle to another person.

S.27 (2) Provides that where the disposition of a motor vehicle has taken place to a private purchaser in good faith and without notice of the hire-purchase agreement or conditional sale agreement, that disposition shall have effect as if the title of the owner or seller to the vehicle had been vested in the hirer or buyer immediately before that disposition.

Taking the Vehicle Repossession Case to Court

The matter proceeded to a full hearing and Mr K’s evidence was presented before the court where Mr. Hussain was able to prove that Mr. K did in fact purchase the vehicle in good faith and that a disposition had taken place.

The court ordered the defendant MotoNovo to return the vehicle to Mr. K and pay all of his legal costs associated with the action he was required to take.

This was a great win; however, it is regrettable that an increasing number of people in the UK still continue to fall victim to similar circumstances as experienced by Mr K.

Vehicles are often sold and bought with finance left outstanding, as many people do not yet know about the possibilities of such issues.

A quick HPI Check will identify if a vehicle has finance outstanding, so our advice is to always check before you buy. Even if the seller says that checks have already been carried out and the results are clear, you can never be too safe.

If you have found yourself in a similar situation, then please do not hesitate to contact our expert vehicle repossession dispute solicitors today. We are based in Manchester and assist clients across the UK.

If you have recently bought a car with outstanding finance, which led to vehicle repossession, we can help you too. 

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