Approved used Mercedes purchased : outstanding finance

[Manc Rick]

Hi, I recently purchased an approved used E class from a Mercedes dealership. Happy with it. I ran an hpi check before buying and noticed that it has outstanding finance (one owner from new, had it just under 4 years) so I assumed that the previous owner had upgraded and the finance outstanding would be an administrative delay.

the salesman said as much when I mentioned this.

3 weeks later, my HPI check has been onto the bank and has today confirmed that the finance is outstanding. Mercedes approved used terms say that they check to make sure That all finance has been settled.

Do I ignore or should I be concerned?

I’ve never experienced this before!

Thanks in advance
Rick

 

[A.J.]

This can be quite normal if the car has previously been the subject of a finance agreement. It can sometimes take a little while to clear from the finance register. Personally I wouldn’t be over concerned as you obviously have an invoice and they being the dealer are responsible for the outstanding debt. Dealers often have an agreement with Finance Houses about the clearance of outstanding debts.

Three weeks is a fairly long time for a settlement debt to be still live though I have to admit. I suppose you could ask them for a letter of confidence to reassure you but I don’t think you have anything to worry about.

I worked in the Vehicle Contract Hire industry for many years and we used to get quite a lot of grief from the fact that vehicles were sometimes slow to clear from the finance register

 

[Blobcat]

It could also be taking a bit longer to process due to Covid-19 and not everyone back at work.

I’d email or write to the dealer and get them to confirm if you’re at all concerned

 

[vtaylor78]

Tell them you’ve had “Can’t pay we’ll take it away” come to your door ! They might move a little quicker then

 

[Manc Rick]

Great! That puts my mind at rest, so thanks all.

I’ll probably leave it a couple of weeks and check again but am not overly concerned now.

@ ‘Can’t pay, we’ll take it away’.

 

[vtaylor78]

Great! That puts my mind at rest, so thanks all.

I’ll probably leave it a couple of weeks and check again but am not overly concerned now.

@ ‘Can’t pay, we’ll take it away’.

As BC said this COVID nonsense has probably slowed everything down.

 

[Timeandleisure]

I thought this thread might be closest to my question regarding settling outstanding finance but within the bounds of settling against a company car leased through a third party.
In essence, a company’s car is due back but conditions from the leasing company state that the car cannot be sold within a year and they reserve the right to buy it back this differs in several areas where one gives 12 months and another 24 months.. however, in the final settlement offer letter, there is no mention of this.
Is a company able to dictate what you do with your property once you have paid for it? Grateful for some insights...

 

[A.J.]

I worked in the Vehicle Contact Hire industry for many years. Back then the Law stated that the Hirer/Lessee could not buy the vehicle Hired/Leased he/she had had the benefit from. This referred to Corporate hirers as the rentals were tax deductible and when the vehicle was bought by the hirer those benefits were not recoverable by the HMRC.

However many cars were sold back to the hirer with the hope that the HMRC were oblivious of the fact.

Before the law was introduced there was a story about a Company who arranged a lease on a Rolls Royce with a zero residual and then at the end of the lease bought the car from the Lessor for a pound and benefitted from the tax deductions and ended up with a Rolls Royce owing him one pound. Now whether that inspired the HMRC to revise the laws I couldn’t tell you.

 

[Timeandleisure]

Thank you AJ... my understanding is then that the company leasing the vehicle cannot buy back the car.... which makes perfect sense when you lay out the RR example above... I just don’t see how anyone can then contract you out of your rights on your own property...
I’m thinking that they cannot possibly say anything if ownership transfers to a party other than them, since the car has now been bought...
The wording just seemed a bit odd especially since two different units of time were mentioned...

 

[A.J.]

Thank you AJ... my understanding is then that the company leasing the vehicle cannot buy back the car.... which makes perfect sense when you lay out the RR example above... I just don’t see how anyone can then contract you out of your rights on your own property...
I’m thinking that they cannot possibly say anything if ownership transfers to a party other than them, since the car has now been bought...
The wording just seemed a bit odd especially since two different units of time were mentioned...

Is the car on a PCP (Personal Contract Purchase) or a Lease. With a PCP there is no problem, that can be bought by you the end user. However with a Lease the vehicle has to be returned to the Lessor. The only option available for the Lessee is to continue the hire on a peppercorn rental.

 

[Timeandleisure]

Yes, the car will be paid off and contract settled in full instead of returning to the lease company.
A new lease on another new company car will then ensue

 

[Rory]

Yes, the car will be paid off and contract settled in full instead of returning to the lease company.
A new lease on another new company car will then ensue

You seem to be mixing terms - paying off and settling are more usually PCP (personal contract purchase) terms. PCP works like HP.

"Lease" relates to Contract Hire.

 

[Timeandleisure]

You seem to be mixing terms - paying off and settling are more usually PCP (personal contract purchase) terms. PCP works like HP.

"Lease" relates to Contract Hire.

You are right! I haven't much experience of this so apologies for any confusion....

As per the contract it's the vehicle's manufacturer's credit scheme, (fixed sum loan agreement) to enable purchse of the vehicle through the employee car scheme. This equates to 12 fixed payments (repayments of interest), followed by one final repayment a month later amounting to the total valus of the loan.

I would then hazard as to it being PCP as it probably fits in with your description of PCP above

 

[Timeandleisure]

Oh, or the option of returnng the car....

 

[Rory]

the employee car scheme.

Ah - well that might be significant!

The scheme can impose whatever conditions it likes. Maybe they're unenforceable - who knows? Could be the sanction would be to forbid further purchases under the scheme.

 

[Timeandleisure]

Ah - well that might be significant!

The scheme can impose whatever conditions it likes. Maybe they're unenforceable - who knows? Could be the sanction would be to forbid further purchases under the scheme.

That's the six million dollar question

 

[MBDevotee]

To get back to the original point here...

If you pm me the reg I will hpi it Weds for you - if it's still on the register you don't have title to the car, and it was illegal to sell the car to you! Yes it's an admin thing in reality, but if the car was written off, you wouldn't get a penny until the finance was settled off.

I'd be over this like a rash!

 

[MBDevotee]

Thank you AJ... my understanding is then that the company leasing the vehicle cannot buy back the car.... which makes perfect sense when you lay out the RR example above... I just don’t see how anyone can then contract you out of your rights on your own property...
I’m thinking that they cannot possibly say anything if ownership transfers to a party other than them, since the car has now been bought...
The wording just seemed a bit odd especially since two different units of time were mentioned...

We need to know was it a....

Personal Contract hire,
Personal lease
Business Lease
Business contract Hire
Lease purchase
Finance lease
Personal Contract Purchase
Hire Purchase with Balloon
Hire Purchase without Balloon......

I could go on....

Each one is a very different thing with different tax rules....

But rule of thumb is, if it says "Lease" or "Hire" you never own the car and are not allowed to buy it

If it's got the word "purchase" in the name of the contract you either CAN buy it or MUST buy it...

So yes if it's a "Lease" they can dictate what happens to the car as it's always their property...

 

[Headhurts]

This update is late to original poster but could be helpful if viewed by others.

I purchased an E Coupe from the main dealership which when I checked had outstanding finance which when I queried with the sales guy confused him so he said he would look into it.

Apparently it’s quite normal for dealerships to have some sort of blanket bank loan which they use when purchasing vehicles and this coupe had been shown on this loan.

The loan was cleared on purchase so it could be possible the original posters car had been put on this type of loan but it was not cleared from loan in a timely manner.

Robin

 

[MBDevotee]

Yes - almost every dealership has a stocking plan - a loan which each piece of stock is added to when bought and paid off when sold... That's very common