 | The Hire Purchase Act (now incorporated into the Consumer Credit Act) states that the first ‘innocent purchaser’ of the vehicle gets ‘goods title’ or ownership. By innocent purchaser, the law means someone who did not know, and who could not reasonably have been expected to know, about the outstanding HP agreement. The HP company would not be able to repossess the car from you, therefore, and should pursue your friend for breach of the Hire Purchase agreement. This applies even if you had bought the car from a trader, as you would still have been an ‘innocent purchaser.
Of course, it follows that if you had known about he HP agreement, or if you had suspicions and didn’t ask any questions, you would not be considered to be an innocent purchaser – ownership would not pass to you and the car could then be repossessed.
You should always consider carrying out checks before you buy a car. There are agencies, such as HPI, who will search their databases and let you know whether the car has an HP agreement registered against it, or whether it has been declared an insurance write-off, and also whether it has been reported stolen. Incidentally, stolen cars (in common with other stolen goods) will always remain the property of the person from whom they were stolen. If you are unfortunate enough to buy a stolen car, then the original owner will be entitled to have it back. |