Areas of Law / Consumer Law

A friend bought a car from a large garage 12 months ago and paid for it outright. The garage has now gone into liquidation and the trustees are now attempting to reclaim the vehicle as it was under finance with the manufacturer. What’s my friend’s legal position?

Your friend should probably see a solicitor about this, but she should be able to fend off the trustees under the “good faith” defence provided by Section 27 of the Hire Purchase Act 1964. This allows private purchasers of vehicles subject to a finance agreement to acquire good title as long as they were unaware of the existence of such an agreement. A customer at a large garage would not be expected to carry out checks to make sure that the car they were buying was finance free.

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