Outstanding finance on bike I bought
Last month I bought a second hand motorcycle from a private seller for £4,000. I have just received a letter from a finance company claiming that there is outstanding finance on the motorcycle which needs to be settled. I was completely unaware of this. Will I be able to keep the motorcycle
Ben, Guildford
Answer
In light of the increased popularity of people buying new motorcycles with finance agreements, it is always recommended to conduct a HPI check when considering purchasing any second hand vehicle.
You have clearly been a victim of an unscrupulous seller as it’s illegal to sell a motorcycle that still has outstanding finance on. In theory the seller should have contacted the finance company to ascertain the “settlement figure” which then should have been paid before the sale was completed.
Unfortunately this means that the motorcycle still legally belongs to the finance company and they’ll expect the registered keeper (you) to pay the outstanding amount.
Section 27 of the Hire Purchase Act (1964) may provide you with a defence. This states that if you bought the motorcycle in good faith and the seller doesn’t tell you of any outstanding finance agreements, then you still have ‘good title’.
It will then be up to the finance company to prove that you don’t have good title.
If you are unable to prove ‘good title’ then the motorcycle can be taken away by the finance company. You will then need to consider trying to recover your money from the seller. This can prove difficult especially if they are uncooperative and ultimately formal legal action could be required. At this stage you may then wish to instruct an experienced solicitor.
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