I'm asking on behalf of a mate who doesn't know I'm asking but any light shed on the situation would be helpful.
Rightly or wrongly, my mate bought a car on finance that was far too expensive for him and as such, he failed (apparently only once) to pay the monthly repayments, so the finance company came along and repossessed it.
Now throughout all this, he's been saying that they'll sell the car at auction, and he'll have to pay the shortfall - so if the car was 20 grand, and they sold it for 10, he'd owe them ten. Having not heard anything since the repossession some time ago, we'd both forgotten about it. However, he saw his car for sale on Autotrader at a garage for a price that would indicate they hadn't paid a million miles away from 10 grand at an auction. Now assuming this is the case, and what he said about owing them the shortfall is true, this would mean he would owe them the best part of 10 grand.
However, he's not heard a thing from them and has found a website saying that anything bought on hire purchase can only be repossessed and that's the worst that can happen. That doesn't sound right considering the finance company are down by a lot of money - apparently they can't take him to court to get it back. Like I said, it sounds laughable and if it's the case, I might just go out and buy cars, not repay them and then get them repossessed!
Can anyone shed some light on the situation? I'd have thought they could (and will) take him to court to get the money back if he doesn't pay it but this site says otherwise and he believes it. Add to that that the finance company haven't asked for their money back and maybe there's some truth in it.
Any help would, as always, be gratefully received.
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You will have to establish a few milestones about this. How much of the finance was paid? (Ideally half of the installments), and was the car looked after. Finally, finance companies do not go to the hassle - or cost - of repoing cars from customers that have missed only one payment. If he paid less than 50% of the payments then he will get a large bill in the post.
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Absolutely nowhere near half - he had the car a matter of months so it was looked after. Missing one payment seemed odd to me too but he swears that's all he missed.
Whether this is relevant or not (it probably isn't) but the expensive wheels that were on it aren't on it anymore according to the pics at this garage.
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it's normally 3 payments and they can be quite savage about it i.e. 'rules is rules' even if you offer to pay up afterwards. Maybe your mate is a bit embarrassed about it and hasn't coughed the full details, it would be understandable
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I might just go out and buy cars, not repay them and then get them repossessed!
You might find your mate can't buy a car on finance any more while the reposession is on his credit history. Getting credit elsewhere might be a lot more expensive as well.
Martin
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Even if less than 50% was/is outstanding - with recovery/selling/expenses, rest assured your mate can expect a very large invoice through the letterbox and theat will grow by the day. I strongly urge him/her to seek help from CAB.
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Audi TT? I think I remember your original post
I think you'll find that the finance company have up to 6 years to ask for their money, take advice
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Yep - that's the one Dox.
I'd passed on all of your helpful thoughts - whether he acts on them or not is another matter. On the plus side, he's vowing never to get finance ever again!
I'll let you know if (but most likely when, sadly) anything happens.
Many Thanks,
Adam
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I would echo what audiaudi said further up. The shortfalls can be eyewatering and make you wonder (even taking the repo costs into account) whether they actually bothered trying to get a good price for the car.
One thing of which I can assure you is that they will take further action to recover any shortfall. That will very probably mean an unwelcome level of attention from a collection agency which will eventually culminate in a CCJ. I am sorry to sound depressing, but I deal with the aftermath of this sort of thing on a regular basis, and these people are not nice.
The CAB is a good place to start, immediately. Also get him to have a look at www.insolvency.gov.uk - that has some useful info for people who are in a bit of financial bother.
HTH.
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"On the plus side, he's vowing never to get finance ever again!"
He needn't worry! The financial institutions will be vowing not to give him any finance! On a more serious note, this may impinge on him getting a mortgage or a credit card in the future.
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He reminds me a LOT of one of my friends who did something similar actually, my mate made it to 2 and a half years and then accepted their offer of voluntary rather than forced repossesion. Only after they took it away did he find out that he could have asked for voluntary termination rather than repossession and then just given the car back to them! As it happens he now still owes them an outstanding debt...
Blue
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He's certainly got himself into a mess - he's already got a credit card so I'm not sure what's happening with that.
He lives at home and I can see him doing so for a good while yet so hopefully there's scope for him to clear up this mess by then. Hopefully.
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