Audi A3 - Hpi Check - Stocking Finance.

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Mon 15 Aug 2022 00:17
Audi A3 - Hpi Check - Stocking Finance. - veloceman
We have been looking for a car for my son. We’ve settle upon a 2019 Audi A3.
The car is from a used car dealer not a franchise. The building and facilities look very respectable.
When we performed a HPI check the vehicle is showing outstanding finance. It is described as Unit Stocking with BMW finance for a 5 month period.
I personally have come across this before and was not concerned as I was buying the vehicle using dealer finance, using the assumption that a finance company would not provide finance on a car that is already financed. My worry is that we are paying cash therefore there is nothing to force the dealer to make immediate settlement.
I’ve read that as we are buying from a dealer in good faith, legally the liability stays with the dealer and the car becomes clear and the lender chases the dealer for the money.
Is this correct or should I be worried?
I guess we could finance the car forcing the dealer to immediately settle but not sure if this is all necessary.
Thank you in advance for your comments.
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Mon 15 Aug 2022 00:31
Audi A3 - Hpi Check - Stocking Finance. - veloceman
Just to add, would simply paying an amount by credit card give me sufficient protection?
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Mon 15 Aug 2022 07:20
Audi A3 - Hpi Check - Stocking Finance. - joegrundy

There have always been opportunities for shenanigans with stocking loans, and with the cashflow problems dealers are currently facing there must be temptation for some.

Registration of the loan with HPI suggests that there is a lien of some sort on the car (standard practice) and thus the dealer does not have clear title to it. A seller cannot pass on a better title than he has himself.

Using a credit card (within the financial limits in CCA) will give s.75 CCA protection - i.e. the credit card company will be jointly liable with the dealer.

For better protection, acquire the car on HP/PCP using a credit card for the deposit, even if you pay off the HP/PCP shortly thereafter. The reason is that when you do this, in law the finance company buys the car from the dealer and supplies it to you. You have no contract with the dealer who merely acts as an agent for the finance company as far as you are concerned.

The finance company is entirely responsible for issues relating to the car including, importantly, under the Consumer Rights Act (rejection, repair, etc.) and will not go bust and be unable to comply with responsibilities. Also, the finance company will be regulated by the FCA which means that if they fail to meet their obligations the matter can be referred to the Financial Ombudsman (slow but effective in my experience).

In my opinion the small amount of paperwork etc. doing it this way is well worth it for the extra peace of mind, especially in a transaction of this (assumed) value.

Edited by joegrundy on 15/08/2022 at 07:21

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Mon 15 Aug 2022 10:28
Audi A3 - Hpi Check - Stocking Finance. - Falkirk Bairn

Financing Dealer Stock is big business.

2 large dealers - Lookers & Pendragon have a turnover of say £6-8Bn a year and yet they have a stock market value of comparatively very little. New cars owned by the manufacturer who get paid when the car sells. Likewise trade-ins are financed by "banks"/specialist lenders and are again paid for the car when the car sells.

My local Indie was telling me a a main dealer franchise with a stockroom the size of a kitchen in a modern house - oil, filters, plugs etc etc are basically all they stock - everything is ordered a few days before it is needed. Contrast that with main dealer stocks 30 years ago - they had several thousand sq feet of specs and racking which was floor to ceiling.

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Mon 15 Aug 2022 10:50
Audi A3 - Hpi Check - Stocking Finance. - veloceman
Spoke to BMW finance. They state the Unit Stocking finance is an agreement between the Finance Company and the Dealer.
They say they will never chase the purchaser.
If the dealer fails to pay up then BMW Finance Would settle the vehicle, clear the tag on the car and chase the dealer for payment. He did mention that they only deal with dependable accounts.
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Mon 15 Aug 2022 11:04
Audi A3 - Hpi Check - Stocking Finance. - Adampr

Personally, I'd offer a £500 deposit and the balance once the loan has been cleared.

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Mon 15 Aug 2022 11:13
Audi A3 - Hpi Check - Stocking Finance. - Cris_on_the_gas

I would tell the dealer that this was not acceptable, ask him to pay for your HPI check because he is being dishonest in trying to sell the car with outstanding finance.

Of course he won't like it but then you walk away and tell him exactly why your walking.

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Mon 15 Aug 2022 11:16
Audi A3 - Hpi Check - Stocking Finance. - pd

I would tell the dealer that this was not acceptable, ask him to pay for your HPI check because he is being dishonest in trying to sell the car with outstanding finance.

Of course he won't like it but then you walk away and tell him exactly why your walking.

Utter twaddle. The dealer is doing exactly what is the total norm in the used car business.

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Mon 15 Aug 2022 15:59
Audi A3 - Hpi Check - Stocking Finance. - Cris_on_the_gas

Utter twaddle. The dealer is doing exactly what is the total norm in the used car business.

So the dealer doesn't own the car he is selling and only pays for it when he gets a buyer. Would suggest dealer is short of money and won't be able to sort out any issues with the car.

You may think it twaddle but would you still think so after purchase and the problems start arriving. So best to walk away.

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Mon 15 Aug 2022 18:57
Audi A3 - Hpi Check - Stocking Finance. - pd

Utter twaddle. The dealer is doing exactly what is the total norm in the used car business.

So the dealer doesn't own the car he is selling and only pays for it when he gets a buyer. Would suggest dealer is short of money and won't be able to sort out any issues with the car.

You may think it twaddle but would you still think so after purchase and the problems start arriving. So best to walk away.

This is quite normal and will be the same at your nearest shiny franchise palace and will apply to new cars as well as used.

The dealer is not being dishonest, just merely doing what 95% of the industry does.

You clearly don't understand how the used car industry operates and called the dealer dishonest which isn't warranted. If you don't understand something why comment?

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Mon 15 Aug 2022 19:46
Audi A3 - Hpi Check - Stocking Finance. - Manatee

This is quite normal and will be the same at your nearest shiny franchise palace and will apply to new cars as well as used.

Especially new cars.

They get direct debited when the car is registered so if the customer pays in advance of delivery it's quite possible the car will still be on a unit stocking loan at that point. I usually pay the deposit with a credit card, and the balance on collection by debit card. They usually ask for payment a few days before delivery, I always refuse, and they always agree!

Things might have changed since I had anything to do with stocking loans (in a past life I used to do stock checks to make sure the cars were still there) but the norm was for stock to be financed for maximum 180 days maximum, at which point they would be directed debited regardless.

The impending DD for a car they have had for nearly 6 months usually makes them quite keen to sell it...

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Mon 15 Aug 2022 11:15
Audi A3 - Hpi Check - Stocking Finance. - pd

You'll find the majority of cars on sale at dealers have some sort of unit stocking.

It is normal for the finance company to register it with HPI - this is to stop it being allocated to multiple unit stocking accounts.

The finance company will never chase the buyer of the car if the dealer defaults, if they did the whole system would collapse.

Just pay with a proper verifiable way (bank transfer, card) make sure you get a proper full receipt of evidence you have bought the car. Do that and you'll be fine.

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Mon 15 Aug 2022 11:25
Audi A3 - Hpi Check - Stocking Finance. - veloceman
Thanks all for you comments.
To be fair to the dealer he didn’t try and hide anything. Before I went to view the car I asked for the Reg number so I could hpi.
He said I’ll send you a copy of mine. Of course I did my own anyway.
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Mon 15 Aug 2022 19:39
Audi A3 - Hpi Check - Stocking Finance. - Big John

We did the same in 2019 when we helped our son buy a 2016 Octavia from Evans Halshaw - it showed up as on finance re stocking on our own HPI (which we always do). I contacted the finance company and was reassured that this is normal practice these days for many dealers. As a safety measure the deposit was paid using a credit card.

Fortunately all went well but it took a few days after purchase to stop showing on HPI as having finance. The other thing we wanted as part of the sale was a replacement stop/start battery suitably coded as even after an extensive test drive when we went back to the car later to check something it was coming up with a low voltage message. This was done and it's been fine since. We also insisted that the engine bay was NOT steam cleaned as part of the pre sales prep - water and modern electrics don't mix!

Edited by Big John on 15/08/2022 at 19:42

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Mon 15 Aug 2022 19:49
Audi A3 - Hpi Check - Stocking Finance. - Xileno

I went down this road a few years ago when I was researching a change, as long as it's described as 'Unit Stocking' then this is quite normal. Infact it's probably quite hard to buy a newish secondhand retailed car that isn't subject to some sort of unit stocking finance arrangement!

Regarding the percentage of Unit Stocked cars I think it was an average of 90% at main dealers but this was probably about four years ago. I imagine the percentage of nearly new cars in other garages is still quite high.

I wasn't aware that this also could apply to new stock. It's the way the business is, whether that's a good thing or not I do not know.

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Wed 17 Aug 2022 08:36
Audi A3 - Hpi Check - Stocking Finance. - Cris_on_the_gas

The finance company will never chase the buyer of the car if the dealer defaults, if they did the whole system would collapse.

Are you certain of this ?

Maybe they have never done this in the past. If I have got title to a vehicle and someone else has it then surely it is mine. Do finance companies just say "well he's a good old boy" I won't bother to chase him and get my money back I'll join that long queue behind the other creditors chasing the bankrupt dealer.

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Wed 17 Aug 2022 09:41
Audi A3 - Hpi Check - Stocking Finance. - Xileno

This was one of the issues I was concerned about but it seems the funder would lose title.

I found this article that covers it half way down the page:

www.motorfinanceonline.com/analysis/the-perils-of-.../

It seems the biggest risk is on the part of the funder not the buyer.

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Mon 15 Aug 2022 20:33
Audi A3 - Hpi Check - Stocking Finance. - SLO76
Normal practice, certainly with new stock but less so with used in my day. Nothing to be concerned about, they won’t be chasing you if the dealer doesn’t settle. That’s why it’s listed as “Unit stocking” or similar on the HPI search.
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Mon 15 Aug 2022 20:40
Audi A3 - Hpi Check - Stocking Finance. - pd

It is quite common on used now. A few years ago finance methods for dealers was far more varied but the banks all found themselves owning finance arms and basically forced used dealers to use them rather than any other sort of finance.

The auction houses all also have their own finance arms which they push very heavily and offer various incentives for dealers to use over cash.

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