Advice needed, taken a car with logbook loan outstanding

[Wheelerdealer1 91]

Well it couldn't have happened at a worse time, but totally my fault

Will try keep it short!

Well spoken man wishes to Px his sports car for an mpv I have had for a month or so, for his growing family

He is keen to do a deal and so am I

Brings the sports car over and it's better then described, so we do the deal, now usually I hpi check my Px before the guy arrives, but my laptop wasn't working and to be honest I just then plain forgot

It's pouring down with rain and well spoken man is keen to get the deal done and get home and miss the traffic

So it's done

Next day before I put it on AT I do the check, and it comes up as a bloody log book loan outstanding!

I contact the company who have now folded but passed on the debt to a new place, they say a small loan was taken out in 2011, it was never paid and they want the car or £3000

So I rang well spoken man, who admits a took a log book loan in 2011 but paid it off long ago, he says it's not his problem and since has not answered his phone

So where do I stand now ? A bit of googling reveals that these loans a different to a car on straight up finance and sometimes these loans aren't even registered on hpi checking systems

Anyway I now have an unsaleable car

[umesh 336]

what does your purchase invoice say about ownership / title ? 

[Wheelerdealer1 91]

Hi Umesh

I don't have a seperate invoice for the Px I take in, it's just added at the bottom with a pound value against my own car

[jimreidvehicle 255]

So does it show on HPI as an outstanding finance agreement?

 

You can seemingly check to see the amount is outstanding via the High Court (England) worth a check under the Bill of Sale !

 

Did he hand in the V5c then? I thought the whole pint of a logbook loan , that the lender held the V5C until it was paid? could it not be the fact that it has been paid yet not updated because the old loan company is out of business?

 

Did the customer sign anything with you agreeing to sell the car as the owner of the vehicle?

 

Jim 

[Wheelerdealer1 91]

Hi Jim

Yes I have all docs for the Px car inc full v5 in his name, 3 keys, history etc

Your right as they do hold on to the v5 as collateral until the loan is paid, but reading online many get duplicate copy of the v5 aswell to give to the loan company

It's a strange one as they guy is not short of a bob or two, his address is a large farm

But his manner on the phone tells me was very aware of the Loan on the car

The company who hold the loan now are adamant it's never been paid off

[Wheelerdealer1 91]

On the hpi check it shows up as a 3rd party trace on the vehicle

[Jack Regan 116]

He knows there is money owing .. He just got lucky that you didn't HPI , it .... This type of thing makes me mad , if boot was on the other foot , you would have trading standards and all sorts of threats being made in your direction , is there no legal route you can go down, perhaps a letter to him from a solicitor asking for proof he paid loan off and a threat of legal action against him .

[Gavin@Rousdon 137]

Hasn't he sold a car that he knowingly has no right / not got good title to sell? I'm sure somewhere he has committed a criminal act. First thing I would do is call Lawgistic's or take legal advice. If he lives at the address on the invoice at least you can chase him.

 

Obtaining goods by deception maybe??

[James Baggott 227]

What an absolute swear word. So sorry to hear this. Maybe our Car Dealer Andy might know what to do. He did a lot of this stuff in his former role at HPI. I'll point him to this post.

[James Baggott 227]

And Gavin is right our Car Dealer Club lawyers could help with this. You get free legal advice with a subscription. See www.cardealerclub.com

[Andy Entwistle 96]

Hi WD, james has just pointed me to this. I spent 10 years in the industry advising and working with Finco's, courts etc.

 

I won't go over the number one rule about never buying before you HPI, you know that, but thats always the golden rule..

 

So, to the issue. Firstly you need to verify that this is a Bill of sale agreement ( the legal term for a log book loan), you are correct that there are differences in how these work, but despite what the BBC have suggested, these are just as likely to be registered with HPI as any other loan. Although the finco has more protection with a bill of sale, recent government review has put them under pressure to work with dealers in situations like this.

 

Sadly, they probably will have title to the car and if it was registered with HPI then we don't have the option to take the route that it wasn't registered.

 

So, its all down to negotiating with the finco. They are only entitled to their original value, so its worth trying to negotiate this down, it may be that they have added fees etc. which you can get taken from the balance to reduce the amount owed.

 

The only glimmer of hope here is that you have been talking to the debtor and you can ask why they have not repossessed the car already if the debt had gone bad, it may be of course that the debtor has moved. They are obliged to go after the debtor for this, but sadly as you now have the vehicle and they know where you are they will take the path of least resistance, you.

 

My advice, store the car somewhere safe while you negotiate, otherwise they could, and probably will, just turn up and take it back...

 

Legally, your customer did not have legal title to the vehicle to sell to you, so you can pursue him for wrongful conversion ( the legal term). However it sounds like he may not be worth very much and you could just be throwing money away.

 

So in summary, Try to get the finco to go after the debtor ( give them his details). Negotiate with them on the value, tell them the car is stored somewhere and you are happy to go to court, this may encourage some negotiation, but if they play hardball you are holding their property, however they will have to provide you with proof of their interest ( which i'd be interested in seeing to see if there is a way out). Lastly, work out if your customer is worth pursuing.

 

if you can get this sorted for £2k, its probably just an expensive lesson, legal fees would be significant in this.

 

Drop me an email, i'm happy to review any documentation you have and give you any help i can

 

Andy

[James Baggott 227]

Well done Andy. Top stuff. Hope this helps WD.

[Tom 164]

Ouch hope you get it sorted WD! 

[Wheelerdealer1 91]

Hi all

And thanks for all the messages and emails from people willing to help, it's at times like this you find out who your friends are!

Andy thanks for taking the time to reply great info !

The way things stand at the moment I'm going to purse the well spoken man, I want my mpv back and he can have his car back, I'm going to have his car recovered to his property where I'm sure my mpv is as that's where he registered it

Unless I get fed to the pigs of course !

[sparky 274]

Hi all

And thanks for all the messages and emails from people willing to help, it's at times like this you find out who your friends are!

Andy thanks for taking the time to reply great info !

The way things stand at the moment I'm going to purse the well spoken man, I want my mpv back and he can have his car back, I'm going to have his car recovered to his property where I'm sure my mpv is as that's where he registered it

Unless I get fed to the pigs of course !

Good on you. Keep us updated. 

[Ken 10]

Good luck pal Although I'm fairly new to the game, I know already it's hard enough toget punters buying your cars without stuff life this going on too. I hope you manage to resolve the issue.

[Andy Entwistle 96]

Let me know how it goes and drop me an email if i cam help with any more info

[Mrs MINI 8]

I think I would be putting an HPI security alert on the MPV he has, just in case he tries to move it on & convert everything back to cash...   just a thought to protect you in the short term, as you can’t recover the MPV if he’s moved it on.

[Wheelerdealer1 91]

Thanks Mrs Mini, great advice , in fact I wouldn't have known I could get a car put on hpi alert for this, and it's something I will take forward

Luckily for me I was able to use my own tactics to get it back, for others it might not be so easy

[Andy Entwistle 96]

I think I would be putting an HPI security alert on the MPV he has, just in case he tries to move it on & convert everything back to cash...   just a thought to protect you in the short term, as you can’t recover the MPV if he’s moved it on.

 

 

The security watch scheme is only for people who actually own the vehicle, such as rental companies etc. Customers can't put markers on a vehicle they don't legally own, otherwise this could open up the system to huge abuse.

[Wheelerdealer1 91]

Andy if we get a car that needs an alert that placed how can a dealer get that done ?

[Andy Entwistle 96]

If you have a car that you think you have a legitimate reason to get an interest put on give HPI a shout and they can look to put in on their security register for you.

 

However, It depends why you need the alert placed. The security alert feature is generally for finance houses, leasing or rental companies, in other words the people who have actual title to the car. In the example of a rental company, they will place their vehicles on the security register so that if a renter driving their car tries to sell it to a dealer, its flagged up to them. This protects them from loosing the car and protects you from buying a car that the punter doesn't own.

 

If you own a car and have lent it out to a customer for example, then you can apply to place this on the register as it is your car. But if its a car that you have sold and then for whatever reason you want to get back ( such as above), this can't be registered. The simple reason being that officially speaking in law you have passed title to the customer ( even if this is potentially fraud), so its no longer your car and legally HPI can't accept your interest as only a court can decide on this. in some instances alerts have been placed on vehicles, but if this is queried then HPI have to remove this immediately. 

 

Sadly (and frustratingly) the only other option open to you is to get a court to put in place an order forbidding the owner from selling the car, while the situation is resolved. For low value cars, its often not worth the cost and time involved, but for more expensive stuff it may be. You would then need to argue with the court that the vehicle was part of a fraudulent transaction and that title should not have passed. 

 

All of this is a result of title law, which i spend over 10 years working with, its complicated and often down to interpretation and often it favours anyone but the selling dealer. 

 

Any more advice, just let me know

[Wheelerdealer1 91]

Thanks Andy, great info there as always !

[Wheelerdealer1 91]

Wow glad to see this story made it into the mag, only just had a chance to look through, blame the new arrival !

Anyway its a good reminder for others not to be foolish like I was😔

[James Baggott 227]

Thanks for sharing it WD. Nice to be able to warn others of the problem