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 owners 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 of 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.
Learn more about hire purchase claims
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. Which 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 actions to impound the car, or demand that you pay off the outstanding finance to prevent them impounding it.
Is it too late to run an HPI Check if I bought the car already?
Checking if a car has outstanding finance is easy. Even if you have already purchased the car, 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 own 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.
Complexity of hire purchase claims
If you’ve bought a car with outstanding finance, representing yourself is very difficult. Issuing court proceedings and claiming back what you are rightfully owed can be complex, drain your time and finances.
With the right legal help the process can be managed efficiently and without much hassle.
Don’t avoid the issue
If you find that you’ve bought a car with finance owing, you should definitely 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.
- 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.
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- Authorise Once we’ve got all the details of your case and you’re happy to proceed, just give us the go-ahead
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