Buying a car with finance outstanding

[warren t claim]

I've been offered a cheap Pug 106 derv that the current owners bought with guaranteed car finance, secured on the car by Jim Davidson type of thing. They bought it over five years and made irregular payments over the first two years or so and then defaulted. Numerous letters and phone calls were ignored and for some reason the finance company never bothered to repossess it. Is it safe for me to buy it and register it in my name???

[Mr Lobster]

No. Avoid it.Even if it is registered to you, the finance company can still repossses it.I knew someone who did something similar. Bought a car on finance and defaulted after a year or so of payment. Meanwhile she moved house and thought she would get away with it. She didn't, about twelve months later she got a knock at the door at about 5am. 'Her' car was already on the recovery truck by then.

[pogweasel]

I wouldn't bother. Unless it's £5 and you're just after something to use for a week, then it's a futile exercise, because you'd never be able to sell it, and you might get a knock on the door ...

[warren t claim]

No payments have been made on it for at least four years. Is there a time limit for chasing up very old debts?

[chester drawers]

No payments have been made on it for at least four years. Is there a time limit for chasing up very old debts?

5 years in this case I think. Is it really worth the bother?EDIT Apologies, as Scooters points out below it's actually 6. There's a proposal to reduce this to 3 yearsbut a tendency to employ Kneecap Finance Recovery to go beyond the current limit.

[scooters]

6 years - but avoid it - debt collection agencies rarely follow the rules and even if the debt has been written off over time they will probably chance it if they can get away with itbest to avoid

[warren t claim]

The thing is that it would cost more to snatch it back than it is worth! Would they bother?

[Mr Lobster]

Might just do it on principle?

[FredTransit]

I read recently if you bought the car without knowing about a debt, it's not your problem. The debt is with the person who took the loan out. The V5 only shows the registered keeper, and the reciept shows the true owner. Agreed though, debt collection agencies don't tend to play by the rules. I might go for it if it was cheap enough, I wouldn't register it at my address though.....

[Mr Lobster]

^ No, if the finance was against the car then the car is the property of the finance company until the finance is settled. So the 'seller' doesn't have the right to sell it. Finance company could quite legitimately take it back.

[peter9000uk]

Depends whether it was a personal loan, Fred. If a personal loan as opposed to finance on that particular car then it will not show up on a HPI/Experian check. If it was finance on that particular car then youare scuppered, you could however approach the finance company for a settlement figure and deduct from what they want for the car and pay off the finance company.Probably more than the car is worth though. Technically the finance co own the car until it is paid for in full.Personally, it sounds as though it could get real messy so I would walk away.

[Guest]

Time for ordinary debt to become statute barred is 6 years, though it can be 12 years for some special contracts like mortgages. A fun bit of trivia is that this doesn't apply for debts owed to the Crown - in around 2006 I worked across from someone who was still collecting debt on the old Community Charge (Poll Tax of 1990-93). You know, the one with the riots! They were actually still getting enough in to make it worthwhile, I think even to this day there's still someone who administers the remains.Anyway! Bear in mind that the time before it is statute barred is automatically extended back to six years from the last payment made by the debtor. So if someone had a debt they'd be chipping away for years and stopped paying now, there'd be another six years to chase it up. So you'd need to find out when the last payment they made was, stick six years on it, then it should be safe. Whether you'd be able to get a logbook is a different matter - a lot of these "logbook loans" places conveniently hold the registration documents for you until you've paid up. Not sure how that works if you get pulled over.As above, the "not your debt, not your problem" bit is wrong sadly. The car will remain property of the finance company so they can just take it back off whoever. That's why they make it show up on HPI checks, because it's a big deal. If it was a personal loan which they used to buy the car fair enough, but doesn't sound like it given their circumstances!In conclusion, unless you reckon you can afford to lose what you put down, it probably isn't worth the grief - there's not really a clever little trick around the whole thing that I'm aware of.Crikey, it's like being at work. Can't decide what to do next - grab a coffee, fax something or go to the toilets and weep at what my life has become. Probably grab a coffee.

[FredTransit]

I wish i could remember where I saw it, somewhere online and very recently. TBH i have to agree with the idea it's against the car, so the car is the property of the finance co. We had our only Mk2 luton from new in 1986. A couple or three years ago our accountant told us we hadn't made the final payment! Technically it's still the property of the finance company. They must have missed it too, cos we were never contacted and it's never stopped us changing the company name on the V5 in the 23 years since.....

[Cavcraft]

The thing is that it would cost more to snatch it back than it is worth! Would they bother?

Yes. They won't actually care too much how much they get for it as they'll just knock it off the original debt and still persue the person who took the finance out on it.A lot of car loand companies seem quite dodgy as it is but they may sell the debt on to another company who aren't quite as fussy when it comes to breaking things like laws, windows and legs.*Oh a lad I knew worked for some outfit or other who snatched cars back and they were more than happy to take them from supermarket carparks, petrol stations or wherever.However cheap that car is it won't seem worth it if they take it when you're miles away and stranded in the snow with no way home.

[Station]

Think it's actually 10 years on finance, I'm probably wrong. I'd steer well clear though - surely there's a way to clear this for a new owner, in a way of filling in a form?

[Cavcraft]

Only if you want to take the finance over. Anyone who did would probably need their bumps feeling as the rates Log Book Loans and their ilk charge are frightening.

[Guest Tony Hayers]

You have to ask yourself one big question - is a Peugeot 106D really worth all of the possible aggrovation that may ensue from the H.P company? Is it balls, when you can buy them for about £300 off the bay.

[Parky]

Avoid. If the finance company catch up with you, the car is gone. Its not worth the bother, seriously. They may give you the opportunity to make the final payments yourself in order to keep the car but with interest rates at 29% or more, plus undoubted additional fees you'll end up paying £5000 for a ten year old Pug Diesel. Ex brother in law got caught out like this a few years back. Paid £6k for a Transit van but the guy he bought it from who promised to clear the finance didnt do it. Couple of weeks later the bro in law had to shell out a further £6k to keep the van. Valuable lesson there.

[outlaw118]

Yep, I agree with everyone who says run away.I have worked in repossessions/debt recovery etc for a while, and trust me, even if the debt was only 10% of the cars value, it's likely that they will take it.Obviously the policy differs from company to company, but some will take the view that in spite of the fact the car is worth £300 say, and once the agent has been out, etc etc that has cost them money + storage+ auction fees, whatever, they may only realise £100, but thats still £100 they didn't have before, you/customer doesn't have the car and LET THAT BE A LESSON TO YOU!!!The idea is that other people who you talk to in the pub or at work or wherever will know that this company don't piss about, and other people who hear about it will be more likely to pay their bills.The only saving grace in this case is that they don't appear to have done much about it so far...but have they? Are the sellers telling you the truth? Are they trying to offload the car because they've had a bailiffs notice already?Just a thought......