Legal Article - Business Law

Is the Seller Liable if the Car is on Finance?

When you sell a car on HP or Conditional Sale the dealer is effectively selling the car to the finance company and they are allowing the customer to use the car while repayments are made, ownership eventually passing to the customer.

Under such agreements the Consumer Credit Act gives equal liability for implied terms of satisfactory quality etc to the seller and the finance company.

The finance company have a powerful position in that they can contractually tie in the seller to indemnify them if there is a problem. It does mean, however, that if the seller cannot settle the claim to the customer for whatever reason, then the finance company must.

 

Published: 10 Mar 2011

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