Hi Beezabsa
Here is a rough guide, I used to work in the finance industry, so have some knowledge of the way the contract are drwn up. However, check your contract and let me know what type of contract it is for a more definative answer.
My advice would also be to check the wording of the contract very, very carefully, especially the small print on the back - check with citizens advice to be certain.
If you sell the bike and there is outstanding HP then you are legally obliged to settle the finance before parting company with the bike. If you sell it and say nothing you have committed and offence - fraud.
Beware also that the buyer does not find ouut and report you for attempting or actually de-frauding him and the finance co - you could then find that the bike is repossessed by the finance co but you still owe the buyer his money - I have seen this happen and it is not nice.
Also if the finance co is owed say £2500 they sell bike in the auction but only realise £1500 you still owe them £1000 plus all their costs and the costs of their recovery agents - repo man!!
Remember many people sell the goods - cars, bikes, boats, etc, etc and then clear the finance, this is technically an offence but if you pay off the loan then no harm done, however, if anything goes wrong, ie you can't or don't pay off the loan you are then liable in every way.
If you part ex with a dealer they are legally obliged to pay the loan off before selling the bike on.
The above is of course only true if the bike is subject to a Hire Purchase Agreement, which should be subject to the consumer credit act 1974 and the various revisions since - there have been numerous.
If the "HP" agt is actually a personal loan then you are the owner of the bike and can dispose of it however you wish and not necessarily pay the loan off - beware of the obvious traps.
If the HP agt is a Lease, lease purchase then you probably do not have the right to sell the bike anyway, if it is a Personal Contract Plan it can come under any of the above dependant on the way the contract is drawn up and worded.
There is also another poss get out clause, if the agt is a "Hire Purchase" Agt - on the documents there should be two boxes - changed recently but probably the case on your docs - one is the "halves" box the other is the "Thirds" box.
Once you have paid one third of the total amount inc interest etc, the car /bike or whatever the goods are cannot be repossessed withouut the HP co getting a court order, the other box- the "Halves" will state that once you have paid half the total amount inc interest etc, you have the right to return the bike to the HP co and walk away, there are many clauses that can affect both these areas so check the wording of your agt.
Not generally recommended unless you have no other options open to you or unless the goods have dropped in value so dramatically that even to sell them would not give you the money to cover the outstanding loan.
The finance industry are lobbying the govt to get this removed as it costs them (EDIT) loads of money every year - although I'm sure they don't go short!!
Hope this helps, if you want any other advice let me know, here or email/pm me and I will let you know asap.
Cheers
Chris
