QLD Car Accident, Car Loan and Car Insurance Write-off

[E59]

Hi, I purchased a car from a private seller about 2 years ago and sold it to someone else a month ago. The new owner has had a car accident and as a result the car was written-off by the car insurance company. The new owner contacted me and advised that the car insurance company has refused to pay her the amount as the vehicle is listed as a security for a finance company.

I contacted the finance company and was advised that the person that I purchased the car from owes money to this company and this car is a part of the assets that secured the car loan. I tried to contact the person that I purchased the car from, but he doesn't answer his phone and he has moved from the only address that i have from him. Now apparently the only way I have is to pay the new owner of the car the balance that she paid for purchasing the car from me and insurance company will pay the finance company.

My questions are:
1- how can I make sure that the loan hasn't been paid? the finance company doesn't disclose any information to me and I don't have access to the seller
2- how can I compensate the buyer's loss? I'm happy to pay but I don't know how to do that in a legal frame.
3- if I pay her, then how can Ii claim my money from the finance company or insurance company?

Please provide any relevant information you may have, I have consulted with a solicitor but he was not helpful at all. He wanted to start by writing to both parties first, but I'm so under pressure from the person that purchased the car from me and need to find a solution fast.

Thank you

 

[John R]

Hi @E59,
It sounds like a messy situation and one that will hopefully serve as a reminder for others when purchasing a used car from a private seller.

I understand your desire to resolve the matter quickly. That said, I agree with your legal advice. Take the time to attempt to resolve the matter by writing to all involved parties, set out the facts and request their assistance to resolve the matter.

Hope this helps. Please keep us updated with your progress.

 

[Sarah J]

Hi E59,

I agree with John above.

If the finance company has a charge over the car, perhaps you could check the Personal Property Securities Register. I, also, understand your desire to resolve this quickly, however, you need to first find out the nature of the charge, whether it is registered, whether it needs to be registered in QLD to protect priority, whether you, as a bin fide purchaser for value without notice of the charge can take the car from the original seller without bringing encumbered by the charge. I would speak with your lawyer, sort out the law in QLD regarding property, charges and bona fide purchasers of goods, then figure out if the insurance company is correct in saying the car is encumbered by the charge. It may well be that the car is no longer encumbered by the charge, and the insurance company is just being cautious.

 

[E59]

Thanks @Sarah J and @John R for your replies
I talked with another lawyer, she advised that from a legal point of view I can't chase the seller and the new owner is in the same situation so I can't lodge a claim against the seller and legally I'm not responsible for the car that is not in my possession anymore.

But I negotiated with the finance company and paid $1000 and got the car released so I hope that the new owner will be able to get her money from insurance.