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Bought a Car with Outstanding Finance?


Most car finance arrangements don’t allow you to sell your vehicle until the loan has been paid off in full. Unfortunately, there are some unscrupulous sellers that will sell you a car with outstanding finance on it, even though it is illegal.

If you accidentally bought a used car that has outstanding finance, we explain your rights.

If the car you bought is still on finance

Under certain conditions, you may have the right to keep the vehicle, this is known as having ‘good title’.

  • You bought the car in good faith with no knowledge that the vehicle had a form of outstanding finance on it,
  • You are a private buyer, and do not buy and sell vehicles commercially.

If the finance company contacts you

If the finance company contacts you about wanting the vehicle/money back, then it is up to the finance company to prove that you don’t have good title, not the other way around.

Explain to them that you bought the car in good faith and include details about the seller and when you bought the car, along with other information such as where the car was advertised, a copy of the receipt or other proof of purchase.

If the vehicle is taken by the finance company

If you believe you have ‘good title’ to the car, contact the finance company immediately and lodge a formal complaint.

If your complaint is not resolved amicably then contact the financial ombudsman service.

If you do not have good title

If you bought from a private seller, contact them and tell them that you have a right to a refund under the Sale of Goods Act 1979, as they didn’t have the right to sell you the vehicle.

If you bought from a trader, contact them and tell them that you have a right to a refund under the Consumer Rights Act 2015, as they had no right to sell you the vehicle.

If you are unable to get your money back through these means, then contact your local citizens advice bureau, and/or solicitor.

Check before buying

For a variety of reasons you should always do a car history check if buying a used vehicle. There are plenty of online companies that do this.

Make sure to do the comprehensive vehicle check that includes any type of finance or loans on the vehicle.

If the vehicle has finance

If the vehicle you are interested in buying has any type of finance on it, walk away.

If you buy a car that you know has outstanding finance, you become as legally responsible as the seller and will not have ‘good title’. The finance company can then rightfully recover the vehicle.