NSW Private Seller Sold Car on Finance - What to Do?

[Mark1989]

I bought a car from a private seller and I wasn't able to check if there's any finance (car loan) on it at the time due to internet issues. The seller confirmed for me the car has no finance, and he wrote on the bill of sale there's no money owing.

The finance company contacted me after I transferred the car to my name to tell me the car still has the full amount owing. I explained what happened and they have been trying to get in contact with the seller.

I tried to contact him myself but number has been disconnected. The finance company called me 2 days later saying that they found new information, new contact number and new address. We both contacted him on the new information and he promised he will have the full amount paid immediately. The next day his number was disconnected and real estate agent confirmed that he left the address too.

The finance company now wants to repossess the car I bought and leave me with nothing and I can't get hold of the seller.

 

[Tim W]

(i) How much money are we talking about?

(ii) Have you taken out a loan yourself to buy the car?

 

[Mark1989]

I paid $25,000 and he owes the finance $34,000

 

[Mark1989]

I didn't take any loans out to purchase the car, it was all my savings really

 

[Mark1989]

(i) How much money are we talking about?

(ii) Have you taken out a loan yourself to buy the car?

Hi Tim
The seller took $34,000 from the finance company
And I paid him $25,000 for the car.

 

[Tim W]

OK. Well, that's almost a bit of good news.
It'll help that it's just you and him, and that there are
not any third party finance providers involved to whom you owe money.

 

[Mark1989]

OK. Well, that's almost a bit of good news.
It'll help that it's just you and him, and that there are
not any third party finance providers involved to whom you owe money.

Hi Tim

The finance company wants to take the car off me as the seller bought the car on finance.

 

[Tim W]

Where currently is the "bill of sale" that you referred to in the original post?

 

[Mark1989]

Where currently is the "bill of sale" that you referred to in the original post?

I have that in my possession

 

[Tim W]

First, let me address the elephant in the room.
It is indeed... unwise... to purchase a car privately without doing a PPSR/title search.
A lack of guaranteed clear title is one of the great risks private car buyers take.*
In this case, it seems that you could have made the checks, but simply didn't.

Second, you might hear about a concept in equity called bona fide purchaser for value without notice.
However, given that you have not done checks that you reasonably could have done
(or that an ordinary person reasonably could have done), I am not sure that you have
the "clean hands" required for equity to come to your aid.

Third, I rather suspect that you probably will lose the car to the financier.

All of which leads to my ultimate suggestion which is,
that given the amount of money involved,
you should consult a solicitor for formal advice.
Yes, this will cost money.**
But the alternative is that you lose both the money and the car.




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* DISCLOSURE: A lifetime ago, I worked for a company that owned
a multi-branch Ford dealership and dealerships in several other vehicle brands,
and an extensive used car business.
That experience informs my opinions on the motor trade to this day.

** No, you will probably not find anyone to do it a contingent fee basis
(ie you will be lucky indeed to find anyone who will do it for "no win no pay").