Dealer hasn't settled finance on PX

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Tue 6 May 2014 19:09
Dealer hasn't settled finance on PX - Ffej

Don't want to give specifics in case I have to get legal people involved, but I recently traded in my previous car as PX for a different make/model at an independent dealer. New car is great, finance on new car sorted no problem.

As part of the PX there was negative equity on the value of the car I traded in versus the PX valuation which I covered as part of the PX deal.

My problem is that the dealer has not yet settled the outstanding finance on my old car as part of the transaction. I realise I am still technically liable for the payments and I have not cancelled the Direct Debit as I don't want to affect my credit rating. I have spoken to the dealer several times since buying the car and he keeps promising to pay off the finance, but so far he hasn't.

Where do I stand from a legal perspective, can I demand the car the I traded in back (and then sell it privately and pay off the outstanding finance?)


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Tue 6 May 2014 19:23
Dealer hasn't settled finance on PX - leaseman

Contact your local Trading Standards office immediately. Contact the Financial Conduct Authority (FCA) immediately.

You have acted correctly in not cancelling your Direct Debit, but keep track of all payments that are debited after the date of Part Exchange. The dealer owes you that as well as the distress and time consumed in sorting out the issue.

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Tue 6 May 2014 19:51
Dealer hasn't settled finance on PX - leaseman
As a corollary to my advice above, the dealer will recently have received (assuming that he is trading legally) a letter from the FCA which reads: "This letter is to tell you when you will need to apply for Financial Conduct Authority (FCA) authorisation or a variation of an existing permission for your firm's consumer credit activities.


Your firm currently has interim permission. All firms with interim permission will need to apply during a set application period that we allocate to them if they want to continue to carry on consumer credit activities for which authorisation would be required."
Print this. Take it or send it to the dealer and tell him what you have done, or about to do. The FCA are itching to show their teeth and prove that they have more guts than the Financial Services Authority (FSA) that used to oversee Consumer Credit activities. They will close them down.

Edited by leaseman on 06/05/2014 at 19:51

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Tue 6 May 2014 19:57
Dealer hasn't settled finance on PX - Ffej

The finance on the new car was through a broker that the dealer uses. Will this have an impact?

Edited by Ffej on 06/05/2014 at 19:58

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Tue 6 May 2014 20:23
Dealer hasn't settled finance on PX - leaseman

If the dealer is using a Broker intermediary, then the plot becomes complex.

It sounds to me that either he was not licensed to arrange consumer credit or debt negotiation under the Consumer Credit Act or he has not applied for Interim Permission under the new FCA regime that commenced on 1st April 2014. Either way, he has committed a criminal offence with a possible custodial sentence. The broker could also be liable.

Tell the dealer and the Broker that you are reporting the facts to the FCA, the Financiers of your Part Exchane, and to the Finance House that your new purchase is with, and, believe me, if they have half a brain, you've lit the blue touch-paper.

Everyone in the industry is awaiting the new regime with some trepidation, and as I said above, I'm sure they are itching to demonstrate their powers in the realm of Consumer Credit. The FSA slapped a few wrists and withdrew a few licenses. The FCA have a history of locking people up!


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Wed 7 May 2014 20:16
Dealer hasn't settled finance on PX - Ffej

Spoke to the dealer again today after speaking to Trading Standards and Finance company as suggested by leaseman. Appart he hasn't got enough money to clear the finance on the car I PX'ed. Just been to take back the car and I will have to sell it privately (should have done this in the beginning with hindsight).

We've already sent off the V5 for the car we PX'ed and we're still waiting for the V5 for the new car - from looking on the DVLA website I should be able to get new ones issues, for a cost, does anyone know if there will be any issues getting replacements?

Edited by Avant on 28/07/2015 at 17:09

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Thu 8 May 2014 16:41
Dealer hasn't settled finance on PX - leaseman

I am pleased to hear that you have managed to get your Part Exchanged car back, but there is another issue that may have to be addressed.

You originally said that you had negative equity in the car - does this mean that you paid over the odds for your new car, in order to cover the negative value, or was the interest rate on the new car finance set at such a level to earn the Dealer (albeit through the Broker) a large commission payment that would cover this negative element?

You can demand to know, and the Dealer/ Broker (actually, both of them) are obliged to tell you, how much commission was earned on the transaction. My first thought is that you are entitled to a rebate of part, if not all, of this.

With regard to the V5, then why was the V5 for the Part Exchange sent to the DVLA?

Only the Yellow section (sold to Trade) should have been sent, with the Dealer retainjng all the other parts.

If the V5 for your new car has been sent to the DVLA, notifying you as the new Keeper, then you will receive a V5 in due course. However, the DVLA should be able to confirm this in a telephone conversation. Give them a call and talk about both cars.

Sounds like a total mess to me and that the FCA should be informed to protect other potential sufferers in the future.

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Thu 8 May 2014 20:33
Dealer hasn't settled finance on PX - Ffej

I covered the negative equity on my Credit Card so we didn't pay over the odds for the new car. The new finance covers the cost of the car and thats it. The dealer has given me a cheque refunding what I paid to cover the negative equity. I don't trust that the cheque won't bounce, so I have also been in touch with the CC company to reclaim the payment I made to the dealer. Just waiting for the forms to arrive so I can sign them.

The V5 for the part exchange was sent as we completed it and posted it off straight away after buying the new car / px'ing the old one as we didn't think anything was wrong at the time. Spoke to DVLA and we just need to sent the rest of the V5 we retained with a covering letter. in order to get a new V5. For the new car, we have filled in a V62 and sent that off after expain to the DVLA that the dealer hadn't received the V5 from the dealer and we weren't entirely sure he'd actually sent it off (DVLA checked and they hadn't received it).

We now have Trading Standards, the Financial Ombudsman and the FCA invovled, all of whom are writing to the dealer, the broker and the finance company (for the new car).

To be honest, in our minds the new car is now tainted by the experience and we are looking at ways we can return it as the dealer has breached the contract by not fulfilling the part exchange (nice lady from the Which legal helpline agreed with us).

I will do my damdest to ensure people know what this dealer is like so they don;t end up going through the same and to be honest if he can't afford the £10K it would have cost him to settle the finance originally then he has some serious cash flow issues and may not be around for too long.

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Fri 9 May 2014 05:35
Dealer hasn't settled finance on PX - leaseman

It certainly seems that you have done as much as you could and well done for persevering.

Please keep us informed of progress or if you need any further assistance.

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