Sold car with outstanding finance

Ssshhh1234

Can anyone help?? Looking for advice regarding car finance for my brother. My brother bought a car on finance from a car dealership roughly 2 years ago €11'500, after 17 months my brother then returned this car to the same dealership before finance term was up as he wanted to upgrade. This dealership organised for him to take out another car on finance and gave him a cheque €4500 made out to his name for the first car. My brother stupidly didn't use this money to clear the first cars outstanding finance as the cheque the dealership gave was alot less than outstanding finance €7800.

He has however kept up the monthly repayments. Now in recent days said dealership has been onto to him stating they sold the car for cash and the person who bought it has since tried to trade it in to another garage only to discover it is still under finance and demanding it be cleared. My brother is in no position now to make a clearance payment and has made this clear to the dealership. Dealership is now threatening my brother that they are going to loose their finance license and that my brother will also be in trouble. Can anyone give any advice on this please. TIA

Berserker5

Why would the dealership not have checked for outstanding finance

Seems bizarre

Atlantic Dawn

You sure it wasn't a personal loan rather than finance actually secured on the car, cant see a €11,500 car having finance secured on it? Normal procedure would be cheque made payable to finance provider and not seller of the car on finance.

Ssshhh1234

Berserker5 wrote: »

Why would the dealership not have checked for outstanding finance

Seems bizarre

Dealership was the same dealership he bought first car from. Dealership had to have known it was still under finance but are now acting that they didn't. My brother is definitely stupid for not making a lump payment off the first car with the cheque but I can't help but feel he was done by the dealer in the first place financed for 11500 and then given a cheque for 4500 17months later with 7800 outstanding!! Also gave 3000 cash for his new car as deposit. Dealership is threatening him with solicitor and court. He is now petrified as to what kind of trouble he will be in and riddled with guilt incase this dealership looses their finance license??

elperello

How did your brother expect that this would end up?

Ssshhh1234

Atlantic Dawn wrote: »

You sure it wasn't a personal loan rather than finance actually secured on the car, cant see a €11,500 car having finance secured on it? Normal procedure would be cheque made payable to finance provider and not seller of the car on finance.

Definetly finance my brother still makes payments every month to the finance company and has recently been in contact for a settlement figure which he can't afford regardless

Ssshhh1234

elperello wrote: »

How did your brother expect that this would end up?

We have been over all of this with him absolutely idiotic thing to do but it's done. What I am looking for here is any advice on how this will go from here for him

elperello

Ssshhh1234 wrote: »

We have been over all of this with him absolutely idiotic thing to do but it's done. What I am looking for here is any advice on how this will go from here for him

OK he is contrite so here comes the penance.
He needs to give the 2nd car back to the dealer and make an arrangement to pay any outstanding debt.
Possibility of a loan from family to help him out?
Then buy a cheap car to keep him going until he can afford something nice again.

yabadabado

So he traded in the first car around April this year ,garage sold it on and now the new owner is selling it again after 6/7 months ?

Was he paying finance on two cars for the last few months ?

What sum is outstanding on the first car now ?

Ssshhh1234

yabadabado wrote: »

So he traded in the first car around pril this year ,garage sold it on and now the new owner is selling it again after 6/7 months ?

Was he paying finance on two cars for the last few months ?

What's outstanding on the first car now ?

This is were I loose track altogether and feel like he was done, dealership put his new car in his partners name as they couldn't finance him again as the first car was still outstanding. Person who bought the first car from the dealership only held onto it for 6 months. There is now a 4700 settlement figure on the first car. Family are in no position to loan him the money

Iodine1

I think there is a lot more to this than just the facts outlined? Dealers don't go putting cars in other people's names without being asked to do so. And getting signatures on documents etc. Also dealer did not do anyone, they paid fhor the car, amount was agreed I expect, and car owner chose not to clear the debt, but spent the money as if it was his. Now the debt has to be cleared and he's wondering what to do?
However it is not credible that a garage would buy a car with finance outstanding and not ensure it was cleared. They should not sell a car with finance outstanding either. Plenty not making sense here.

mickdw

Considering the facts as outlined, the dealer had no right to issue cheque to brother in this case.
They should have simply cleared finance and worked figures into new car and took deposit as required to make the figures add up.
Brother was a clown but garage have to know how to handle the deal. The fact that brother kept paying 1st car suggests he clearly knew what he was supposed to do so no leg to stand on.

Ssshhh1234

Brother has definitely been an ass! He has been told that 100s of times since this came to light. The only thing he can do at the moment is try pay off extra money weekly on outstanding finance and has informed the dealership this but this is going to take a couple of months.

What do you think is next in terms of punishment?

What sort of trouble is my brother in? Could this end out in court?

Could the dealership really loose their finance license?

seamus

Given the outline you've presented, the dealership have done something dodgy with this deal, and the regulator could certainly punish them for it.

It sounds like there's probably more to it that he's not letting on, a handshake agreement he made with the garage.

Any road, he's in less trouble than the garage. They could take him to court, but it's a civil matter. He could get a judgement made against him for the amount of the debt, but since he's making regular repayments this is unlikely.

Ultimately it's not a huge deal, he's not going to prison or getting kicked out of his house or anything. But it will be a soure of stress and hassle until it's paid, and it will affect his ability to get loans in future. His priority should be making this go away. It's not a huge amount of money, so a personal loan, credit union loan, whatever. If he gets on well with his employer, they might be willing to help him out.

TimHorton

Ssshhh1234 wrote: »

Brother has definitely been an ass! He has been told that 100s of times since this came to light. The only thing he can do at the moment is try pay off extra money weekly on outstanding finance and has informed the dealership this but this is going to take a couple of months.

What do you think is next in terms of punishment?

What sort of trouble is my brother in? Could this end out in court?

Could the dealership really loose their finance license?

He should have known and I have seen a similar case where a garage in error issued an insurance cheque for a written off car that was on finance , the guy was prosecuted and convicted of fraud.

Ssshhh1234

seamus wrote: »

Given the outline you've presented, the dealership have done something dodgy with this deal, and the regulator could certainly punish them for it.

It sounds like there's probably more to it that he's not letting on, a handshake agreement he made with the garage.

Any road, he's in less trouble than the garage. They could take him to court, but it's a civil matter. He could get a judgement made against him for the amount of the debt, but since he's making regular repayments this is unlikely.

Ultimately it's not a huge deal, he's not going to prison or getting kicked out of his house or anything. But it will be a soure of stress and hassle until it's paid, and it will affect his ability to get loans in future. His priority should be making this go away. It's not a huge amount of money, so a personal loan, credit union loan, whatever. If he gets on well with his employer, they might be willing to help him out.

Thank you for your reply. It's quite a mess he's in that's for sure. At the moment his only option is to keep paying as he has been monthly and pay extra weekly. Guy from the dealership has threatened to tell people they know mutually about the situation which my brother is worried about, although I'm sure that is a data protection breach against my brother and have told him to advise the dealer of this.

lawred2

Ssshhh1234 wrote: »

Can anyone help?? Looking for advice regarding car finance for my brother. My brother bought a car on finance from a car dealership roughly 2 years ago €11'500, after 17 months my brother then returned this car to the same dealership before finance term was up as he wanted to upgrade. This dealership organised for him to take out another car on finance and gave him a cheque €4500 made out to his name for the first car. My brother stupidly didn't use this money to clear the first cars outstanding finance as the cheque the dealership gave was alot less than outstanding finance €7800.

He has however kept up the monthly repayments. Now in recent days said dealership has been onto to him stating they sold the car for cash and the person who bought it has since tried to trade it in to another garage only to discover it is still under finance and demanding it be cleared. My brother is in no position now to make a clearance payment and has made this clear to the dealership. Dealership is now threatening my brother that they are going to loose their finance license and that my brother will also be in trouble. Can anyone give any advice on this please. TIA

Usually the dealer clears the existence finance directly. Never seen a case where they handed a cheque over in the belief that the seller will clear the finance themselves. Strange one.

Heres Johnny

That dealership shouldn't be in business, they're doing everything wrong. Clearing finance incorrectly, selling cars with finance owing and threatening to slander a customer.
Go over to motors forum with this, loads of car sales guys over there would love to hear this story.

seamie78

car went from 11500 in value to 4800 in 17 months that's some depreciation

Ssshhh1234

OSI wrote: »

It sounds like your brother isn't telling the whole story here to be honest. There seems to be at least some form of fraud being carried out somewhere and I would be very surprised if it's being done entirely at the dealers discretion.

He's nothing to gain by hiding anything at this rate. He got caught up wanting a new car was given a cheque for the first car made out to his name he should have lodged it and paid it off finance but he stupidly didn't and spent it. He has kept up monthly repayments car was sold on by car dealer for cash obviously expecting new owner to hold onto it for longer than 6 month's. So it has come back to bite him rightly. The dealer now wants it settled and he is no position to do so other than as said already try pay extra weekly. He's not even sure if the dealership has gotten the car back from the cash buyer as dealership won't say. Huge mess. Finance company knows nothing as he has been in contact to find out settlement figure.

Ssshhh1234

seamie78 wrote: »

car went from 11500 in value to 4800 in 17 months that's some depreciation

He has all documents to say car was bought in hire purchase for 11500, when he handed it back to the dealership they issued the cheque for 4500 but this was nowhere near the figure outstanding. Pure stupidity on my brother's behalf it's nearly laughable.

yabadabado

Ssshhh1234 wrote: »

Thank you for your reply. It's quite a mess he's in that's for sure. At the moment his only option is to keep paying as he has been monthly and pay extra weekly. Guy from the dealership has threatened to tell people they know mutually about the situation which my brother is worried about, although I'm sure that is a data protection breach against my brother and have told him to advise the dealer of this.

I doubt the garage will do that and even if it did it's no big deal.If anything it makes then garage look bad,they obviously ****ed up or were at some sorta shenanigans that your brother isnt telling you about.

If unheard of a garage doing similar I'd have serious reservations about giving them business.

lawred2

Ssshhh1234 wrote: »

He's nothing to gain by hiding anything at this rate. He got caught up wanting a new car was given a cheque for the first car made out to his name he should have lodged it and paid it off finance but he stupidly didn't and spent it. He has kept up monthly repayments car was sold on by car dealer for cash obviously expecting new owner to hold onto it for longer than 6 month's. So it has come back to bite him rightly. The dealer now wants it settled and he is no position to do so other than as said already try pay extra weekly. He's not even sure if the dealership has gotten the car back from the cash buyer as dealership won't say. Huge mess. Finance company knows nothing as he has been in contact to find out settlement figure.

that is not how the system works

the garage is supposed to clear any existing finance using the value of the car being traded in and maybe a further deposit

or re-indeed by refinancing

what is never supposed to happen is a personal cheque to the customer..

either the brother is not telling the OP everything or the dealer is dodgy

Johnny Sausage

I dont think you(r brother) is/are telling the truth,

Hoboo

Ssshhh1234 wrote: »

He has all documents to say car was bought in hire purchase for 11500, when he handed it back to the dealership they issued the cheque for 4500 but this was nowhere near the figure outstanding. Pure stupidity on my brother's behalf it's nearly laughable.

Sorry I'm a bit lost. He buys car in January let's say, he sells car in June the following year. Depreciation of 7k? That's nonsense. From a 35k car perhaps, not 11.5k

You sure he's not being a bit creative with his figures, and it's not 7500 he got a cheque for? Enough to clear finance but decided to spend money that wasnt his, not sure whether thats fraud or straight up theft, but it's definitely not legal.

I'd love to hear the garages side,.I'd expect a very different story.

In answer to your question, get legal advice, sounds like he's lost his paddle

Mango Joe

I'm not sure whats going on here, but I just wanted to say thats its laughable that the Dealerships main threat is to publicly announce what a complete pack of amateur hour Morons they are......

Your brother should consider taking a legal action against them for selling him a car that was under outstanding finance and for making his life a misery ever since through their dumb and dubious business practices.

They're supposedly in the motor business and so should be conducting themselves like credible, well-informed professionals - I've no doubt that they walked your easily-led brother into this mess.

Hoboo

Mango Joe wrote: »

I'm not sure whats going on here, but I just wanted to say thats its laughable that the Dealerships main threat is to publicly announce what a complete pack of amateur hour Morons they are......

I don't believe the OPs brother's story.

lawred2

Hoboo wrote: »

Sorry I'm a bit lost. He buys car in January let's say, he sells car in June the following year. Depreciation of 7k? That's nonsense. From a 35k car perhaps, not 11.5k

You sure he's not being a bit creative with his figures, and it's not 7500 he got a cheque for? Enough to clear finance but decided to spend money that wasnt his, not sure whether thats fraud or straight up theft, but it's definitely not legal.

I'd love to hear the garages side,.I'd expect a very different story.

In answer to your question, get legal advice, sounds like he's lost his paddle

Why would they give him a cheque to clear finance that they themselves arranged?

Ssshhh1234

Hoboo wrote: »

Sorry I'm a bit lost. He buys car in January let's say, he sells car in June the following year. Depreciation of 7k? That's nonsense. From a 35k car perhaps, not 11.5k

You sure he's not being a bit creative with his figures, and it's not 7500 he got a cheque for? Enough to clear finance but decided to spend money that wasnt his, not sure whether thats fraud or straight up theft, but it's definitely not legal.

I'd love to hear the garages side,.I'd expect a very different story.

In answer to your question, get legal advice, sounds like he's lost his paddle

He has the cheque lodgement receipt and has shown this to us, €4500 was the cheque however the outstanding finance was €7700 so left a shortfall of €2200. We have established my brother is a complete idiot. Basically he brought the car back took a hit for €2200 and also handed over €3000 towards his new car he done this by electronic transfer so there is proof of that also. It's a bloody shambles.

All in all there is wrong doing on both sides my reason for asking for the advice was to try find out what sort of punishment he is facing.

lawred2

Ssshhh1234 wrote: »

He has the cheque lodgement receipt and has shown this to us, €4500 was the cheque however the outstanding finance was €7700 so left a shortfall of €2200. We have established my brother is a complete idiot. Basically he brought the car back took a hit for €2200 and also handed over €3000 towards his new car he done this by electronic transfer so there is proof of that also. It's a bloody shambles.

All in all there is wrong doing on both sides my reason for asking for the advice was to try find out what sort of punishment he is facing.

none really

as he's been meeting the repayments he's satisfying the conditions of his loan..

this is a problem for a dealer who sold a car with existing finance.

banie01

Ssshhh1234 wrote: »

He has the cheque lodgement receipt and has shown this to us, €4500 was the cheque however the outstanding finance was €7700 so left a shortfall of €2200. We have established my brother is a complete idiot. Basically he brought the car back took a hit for €2200 and also handed over €3000 towards his new car he done this by electronic transfer so there is proof of that also. It's a bloody shambles.

All in all there is wrong doing on both sides my reason for asking for the advice was to try find out what sort of punishment he is facing.

Why would the dealer not just issue a cheque for €1500 in that case?

i.e Keep back €3000 from the "settlement" figure to put towards the new car?

Indeed with the totals above coming out at 5200 from the finance charge and the 3k contribution to the "new car.
The money back to your bro being 4.5k, there is only a €700 difference?

None of the figures, the sequence or the story make any sense?

Someone, somewhere along this chain made a complete balls of a credit fraud IMO.

elperello

Punishment won't come into a situation like this if you take action now.

Get a responsible adult to accompany him to the garage and work out a deal.

It may be, like I said in my other post , that he will have to lose the car but that won't be the end of the world.

Get the figures down on paper and start talking. Forget about legal action this can be sorted.

phildin

I think lawred2 might have made the most important point, if your brother is meeting the obligations of his loan, then he's likely not in any trouble. It sounds like somebody has messed up but it's possible that it's the garage that failed in their duties and they're trying to make it your brother's problem rather than theirs.

You might consider the following:

1. Ask whoever is financing the loan whether they consider any conditions to be unmet, and if they do, to list them and explain why

2. Bring the loan agreement to citizens advice or MABS to help make your own determination of the above

3. Ask a solicitor to review: it might be more than it's worth for the amounts involved though

You could consider getting a loan from the bank or credit union to clear the outstanding balance and put everything back on a regular footing. This could be a difficult scenario to explain to a lender though so I could see them being not too keen to lend.

By parting with the asset like this (without consent of the lender, and it doesn't matter that he kept up the repayments) your brother has breached the finance agreement and the loan is liable to be discharged by him immediately on demand. If it's not paid the lender can seize the asset if they choose. They can sell it and get a civil judgment against him for the balance. They can also just sue him now and get a Judgment for the full amount.

On the criminal side, your brother may have committed offences contrary to the Theft & Fraud Offences Act, 2001, depending on the paperwork he signed and whether he promised orally or in writing to the dealership that he would use the cheque to clear the finance.

This may all come out if the person who bought the car goes to the Gardai about it all. They'll be hopping mad and rightly so. I would advise them to go to the Gardai as well as instructing a solicitor about all this.

The dealer is certainly liable to them for selling on the car with outstanding finance. The dealer is likely to point to your brother as having trousered the money intended to be applied to clear the loan. It does them no good against the new purchaser but I don't see them not attempting to drag your brother into the whole sorry mess.

At that point the Gardai will be looking to speak to your brother, and he should get legal advice from a solicitor specialising in criminal law before he interacts with them.

His future prospects of credit are also likely to be badly blighted by this.

If your brother wants to sleep easy on this he would need to discharge the balance outstanding on the finance pronto.