Hire Purchase Claims

bought a car with outstanding finance
Legally reviewed by: QLTT, LLB (Hons), BPC Karl Kalina Updated:

Hire Purchase Claims

If you have recently purchased a car with outstanding finance, you might be wondering, I bought a car with outstanding finance(HP), what are my rights?

You need to take action. If you don’t, you could lose your car and your entire car payment.

Your Consumer Rights if You’ve Bought a Car with Outstanding Finance

As a victim of a bad sale, you have more rights than you may realise. Even though the finance company is initially still the formal owner of the vehicle, you can use the Hire Purchase Act to claim ownership rights to the vehicle instead of the finance company or compensation for your purchase money.

Issuing proceedings to start a court case claiming your consumer rights is a complex process that can quickly drain your time, energy and finances. However, with the right legal assistance at hand, the process can be managed swiftly and without much cost or hassle.

Have you bought a car with outstanding finance? Our expert HPI solicitors can help you claim back your losses.

Issuing Proceedings and Claiming Back Your Losses

You may have not realised it, but the second-hand car you recently purchased could have been sold to you with outstanding finance on it. If this is the case you must take action, as your car doesn’t actually belong to you, and it will likely be taken from you.

The process to claim back your losses after being sold a car with outstanding finance is relatively straightforward, but could take between one to six months, depending on the particulars of your case.

Your solicitor will do most of the work for you and only require you to physically present on one occasion at the court hearing if it ever gets that far. This way your solicitor can ensure that the process causes you as little disruption as possible.

If you aim to manage the process yourself without the legal support from experienced solicitors you may find the process taking significantly longer and more of your time will be required.

About Outstanding Finance and Hire Purchase Agreements

Many people buy cars on finance to spread the cost of the purchase. But if someone sells you a car that is still under such a hire purchase agreement, then they don’t officially own it. What they don’t own they can’t sell, so even though you paid for the car, it doesn’t now officially belong to you.

Until the final payment on the purchase agreement is made, the finance company are still the registered owner of that vehicle. That means that if you buy a car with outstanding finance still on it, the finance company can reclaim the car from you without any obligation to give you a refund.

Did You Buy a Car with Outstanding Finance?

Buying a car that has finance owing is very unfortunate. Luckily though, you do have rights. Even if you failed to use an HPI check to see if the vehicle had outstanding finance, you can still make a claim.

Making a claim will make sure you get to either keep the vehicle with official ownership or claim full compensation for the payment you made if the vehicle has been repossessed.

Our expert solicitors have never lost a hire purchase case and can help you win yours too. We understand the frustration these types of cases can cause and are here to support you through every stage.

I’ve Bought a Car with Outstanding Finance, What Should I Know?

What Does HPI Stand For?

HPI stands for Hire Purchase Inspection, though the ‘I’ is sometimes mistaken for ‘Index’, ‘Investigation’ or ‘Information’.

What Does ‘Outstanding Finance’ Mean?

The abbreviation HPI is most often used by people who are thinking of purchasing or have recently purchased a second-hand car.

If a second-hand car has HPI on it, also known as ’outstanding finance’, it means that the car is still owned by the finance company. The driver has a hire purchase agreement in place that has not yet ended.

What is a Hire Purchase Agreement?

A Hire Purchase Agreement allows the driver to pay either nothing or a relatively low deposit to start driving the vehicle. They will then continue to pay the finance company a fixed fee on a monthly basis until the hire purchase agreement ends.

When this happens, the driver often gets given the option to exchange the car and start a new hire purchase agreement or buy the current car outright.

Why Do I Need to Know About Hire Purchase Agreements?

Until the hire purchase agreement expires, the driver is only effectively renting the car. They haven’t purchased it – the finance company owns it. This means that the driver has no authority to sell it. If you are unlucky enough to buy a car in this situation, you do not own the car you’ve paid for, even if you are given paperwork seemingly proving that you do.

It won’t take long before the finance company is notified and they take action to impound the car or demand that you pay off the outstanding finance to prevent them from impounding it.

Is it Too Late to Run an HPI Check if I Think I Bought a Car with Outstanding Finance Already?

Is there outstanding finance on my car? If you’re not sure it’s best to find out more as soon as possible. Checking if a car has outstanding finance is easy. Even if you have already purchased the car, and you’re worried your car has outstanding finance on it, it’s in your interest to run a quick check.

If the car does have outstanding finance on it, it’s better to find out now on your terms than with a knock on the door from the police. After being informed your car has outstanding finance you should get in touch with an experienced solicitor immediately.

The complexity of Hire Purchase Claims After Buying a Car with Outstanding Finance

If you’ve bought a car with outstanding finance, representing yourself can be very difficult. Issuing court proceedings and claiming back what you are rightfully owed can be complex, drain your time and your finances.

With the right legal help, the process of claiming back your losses after purchasing a car with outstanding finance can be managed efficiently and without much hassle.

If You’ve Bought a Car on Outstanding Finance, Don’t Avoid the Issue

Taking Action

If you find that you’ve bought a car with finance owing, you should not try and avoid the issue. Any attempt to hide the vehicle or obstruct the finance company will worsen your situation significantly.

The finance company may contact the police and report the car as stolen. Always comply with the finance company, and seek legal advice straight away. If you don’t manage the situation correctly you could lose both your money and your car.

At AWH we can help people across England and Wales from our Manchester and Blackburn offices to claim back their losses after buying a car with outstanding finance.

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Frequently Asked Questions

What is HPA?

HPA is a Hire Purchase Agreement and allows the driver to pay a low deposit or even nothing to drive away with the vehicle. They will then pay a fixed monthly fee until the agreement ends. During this time, the care belongs to the finance company, not the driver.

What is HPI?

HPI stands for Hire Purchase Inspection and is a way of finding out if a previously used vehicle has HPA on it, which would mean that the vehicle is still owned by the finance company.

What can happen if there is outstanding finance on my vehicle?

If there is outstanding finance on a vehicle you recently purchased, then it is likely that the finance company will ask you to pay the outstanding amount or impound your car as you do not actually own the vehicle, even though you paid for it.

If you have bought a car with outstanding finance that you weren't aware of, we can help you claim back your losses.

Can I still run an HPI check if I've already purchased the vehicle?

Yes, you can still run an HPI check even if you have already purchased the vehicle. Running a check is a good idea in case you do find that you need advice from a solicitor regarding outstanding payments.