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Alex J.
Alex J., Solicitor
Category: Law
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Experience:  Solicitors 2 years plus PQE
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I bought a car through Ebay and paid cash to the seller a year

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I bought a car through Ebay and paid cash to the seller a year ago. Six weeks later Finance Company contacted me and informed me that the car has an HP on it. I got in touch with the seller and he said he was going to pay it off. He started paying in instalments and I was left under the impression that he's paid it off. This morning the Finance Company has called and they are more or less saying the 'seller' is in arrears, he's stopped paying them and that the worse scenario could be them taking the car off me! I called the 'seller' but he's not answering my calls. The o/s loan is approx £2K
I want to know by Law, what my rights are, and if the HP company can take the car off me....the car is worth around £5-6K.
Submitted: 2 years ago.
Category: Law
Expert:  Alex J. replied 2 years ago.
Hi
Thank you for your question and welcome.
My name is ***** ***** I will assist you.
Do you have the seller's home address?
Kind regards
AJ
Customer: replied 2 years ago.

Hi AJ

I think I should have it, as I've got the log book for the car, and it has the previous owner's full address.

Expert:  Alex J. replied 2 years ago.
Hi,
Thank you.
Under the Sale of Goods Act 1979 - S.12 there is an implied term that a seller has good unencumbered title to what they are selling.
If the seller did not have this you could potentially sue him for the loss you will suffer i.e the £2k you might have to pay the finance company.
Are the finance company asking you for the money?
Kind regards
AJ
Customer: replied 2 years ago.

AJ, how can I find out whether the seller has 'good unencumbered title'?

No, they haven't asked me as yet. All they did was inform me how it stands with the 'seller'.

I've called the seller a few times but he's not answering. The FC will call me in a couple of days to find out whether the seller has been in touch.

In your expert opinion, what am I facing?

Expert:  Alex J. replied 2 years ago.
Hi,
Thank you.
The point is you do not have to find out if he had good unencumbered title. It is implied in the sale of goods that he is entitled to sell the goods - under S.12 of Sale of Goods Act 1979. If he was not then he is in breach of contract you.
Worst case scenario you will either have to hand back the car (and then you will get the difference once it is sold and finance company repaid), or negotiate with the finance company to pay off the finance. You can then sue the seller for your loss either way.
The only concern is if the seller does not actually have the money to pay.
I look forward to hearing from you.
Kind regards
AJ
Customer: replied 2 years ago.

Hi AJ

I'm sorry I got confused. The seller took a loan from the Mobile Money Shop and had the car as a security. He didn't purchase the car on HP. He was short of money and took maybe £2000 loan from this money shop.

Is it the same as taking HP loan?

Expert:  Alex J. replied 2 years ago.
Hi
Thank you.
What evidence does they money shop have that the car is security for the loan?
The fact the car was used as security means it is encumbered, and the seller will be in breach of S.12.
However the money shop does have to prove that you should have known about the security (on reasonable enquiry) - you may have a defence that you bought the car in good faith and are a bona fide purchaser and accordingly they should make any claim to the seller directly.
In event if they do take the car - make sure they provide you with proper paper work. You can the sue the seller using this link https://www.moneyclaim.gov.uk/web/mcol/welcome
Kind regards
AJ
Customer: replied 2 years ago.

Thanks, AJ.

On this grounds, can I be lucky if they don't take the car off me? - At the time of purchase my cousin did an online check on the car and nothing came up.

I can ask them if they can produce such evidence that the car was put on security. Why can't they deal with the seller? Why are they contacting me? - Is that how the law works because I've the car in my possession?

Customer: replied 2 years ago.

Hi AJ

It's a logbook loan the 'seller' took.

I was not made aware of this by the seller and only came to know about this after 6weeks when I received a letter through the post from the Loan company. I got in touch with the seller and he said it wasn't a problem as his intentions are to pay the loan off and he will continue to do so on monthly basis. For peace of mind I also spoke to the loan company and they confirmed that the seller is keeping up with the payments. Its unfortunate that he has stopped paying and is uncontactable and the loan company have contacted me after one year.

Expert:  Alex J. replied 2 years ago.
Hi
Thank you.
They are contacting you because they believe the car is their security and they probably cannot contact the seller.
I think you need to try and be firm with them. Write to them and say that as it stands:
- You deny they have any claim on the car;
- You were not notified of the car being secured;
- You are a bonafide third party buyer of the car and have acquired good title to it in good faith;
- As it stands you have not been provided with any evidence that they have any claim to the car;
- Say you are happy to put them in contact with the seller, but cannot respond to otherwise unsubstantiated threats to take your car.
- Say you assume this brings the matter to a close.
If they then want to try and take the car they will be forced to provide you with evidence of the security.
Kind regards
AJ
Customer: replied 2 years ago.

AJ, thank you so much.

Could you please draft me a letter to that effect?

Thanks.

Expert:  Alex J. replied 2 years ago.
Hi
Thank you.
I am sorry but I am not really allowed to draft documents on this site, as it is an answer and question service.
If you prepare a draft I can check it over for you?
Kind regards
AJ
Customer: replied 2 years ago.

Hi AJ, no problem. The finance company has called and I've briefed them with the points you mentioned. They are now saying they have evidence to prove that it's a logbook loan and they have legal rights on the car and they can take the car off me! - this evidence is going to be emailed to me shortly.

What do I do if such evidence exists? - If I were to pay them off, how can I get my money back from the seller? Taking such matters to court, are they expensive? Time consuming?

Expert:  Alex J. replied 2 years ago.
Hi,
Thank you.
In the scenario that they can take the car - on that basis, you can try and negotiate with them for the release of the security to you. They will want this resolved quickly, you could offer them a reduced amount to release their security.
As the value of the claim will be no greater than £2K you can conduct the claim yourself in the small claims court. https://www.moneyclaim.gov.uk/
If you want me to review the evidence when you get it, then please post it to this link and I will review it.
Any feedback in the mean time is gratefully received.
Kind regards
AJ
Customer: replied 2 years ago.

You're very helpful, thank you. I'll wait to get Andy's response and forward it on to you. Once you give me your expert opinion, I'll rate your service, which is 5* and close this matter. Please bear with me.

Expert:  Alex J. replied 2 years ago.
Many thanks.
I look forward to hearing from you.
Kind regards
AJ
Customer: replied 2 years ago.

Attachment: 2015-07-22_115907_hpi_bd04dcu.pdf

AJ, can you open this attachment?

Expert:  Alex J. replied 2 years ago.
Hi,
Thank you.
Yes I can open them.
I will review them now.
Kind regards
AJ
Customer: replied 2 years ago.

Thanks.

Expert:  Alex J. replied 2 years ago.
My apologies i have had internet connection problems today. I am reviewing these PDFs now.
I will be working on my answer tonight and will post it in the morning.
Thank you kindly for your patience.
Kind regards
AJ
Expert:  Alex J. replied 2 years ago.
Hi,
Thank you.
Having reviewed the PDF - is this the only evidence they have provided to you of the log book loan? Have they given you a copy of the bill of sale?
Kind regards
AJ
Customer: replied 2 years ago.

Morning AJ

Thanks for your email.

This is the only evidence they have given me.

Furthermore, the 'seller' contacted me yesterday and confirmed that he's got in touch with the Loan Company and they now want an upfront payment of £900 before close of business, (this was yesterday), otherwise they'll take the car - He said he was going to arrange this but I haven't heard from him.

AJ, can I speak to the Loan Co and arrange a settlement, because I paid £5K for the car, I love the car and don't want them to take it off me over £1,719.00

Expert:  Alex J. replied 2 years ago.
Hi,
Thank you.
Yes you can arrange a settlement with the Loan Company. You will only then be able to recover the money if you sue the seller.
The Loan company can claim the car if they can prove they have a log book loan.
I would only settle with the Loan company at the last minute. Give the seller every opportunity to pay in the first instance.
I look forward to hearing from you.
Kind regards
AJ
Alex J. and other Law Specialists are ready to help you
Customer: replied 2 years ago.

Thanks, ***** ***** ask them for a copy of the Bill of Sale.

When I spoke to the Seller, he sounded as if his intentions are to pay the loan co off.

As advised, I'll leave it up to the last minute to agree a settlement figure with them.

Thank you so much for your 5* service.

All the best.