Hello,not sure if in the right Area, But just a query. My Mother passed away recently, with a car on HP.What happens to the car and its repayments now? .Father has now the car parked outside his house ,he cant drive ,and has very little money saved. He does own his house now with passing of my mother, Thanks in advance.
Car HP
- Thread starter mosii
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Andrew Murphy
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It is advisable to let the HP company know as soon as possible that your mother has passed away, especially as the car belongs to them until all payments are made, including the final option to purchase fee.
However before you do so, consider your options. These are:
1. Hand the car back to the HP company.
The HP company will most likely sell the car and apply the proceeds to the balance outstanding, adjusted for the costs of disposal and any interest rebate due on full/partial early settlement. If there is a shortfall they could lodge a claim against your mothers estate, but I'd guess they won't bother if the balance is immaterial and will simply write it off. If there is a surplus I'd imagine they would magic it away through inflated disposal charges (not being cynical
2. If you, or any family member or friend wants the car then there are technically 2 options to acquire it:
2.1 Take over the existing HP contract (subject to HP company agreement).
Ask the HP company to assign the HP contract to the person who is interested in the car. The person will obviously need to be credit approved first as they will be taking over the remaining debt. Note that if the car is worth a great deal more that the amount outstanding you should negotiate an upfront cash adjustment (these negotiations do not involve the HP company, nevertheless the proceeds form part of your mother's estate, so take legal advice if necessary).
2.2 Settle the outstanding HP balance
If the person interested in your car is a cash buyer ask the HP company for an early settlement figure and pay that so you can pass on clear title. Sell the car and recover the settlement amount from the proceeds. The surplus in sales proceeds ought to be included in your mothers estate as stated above. Bear in mind that the calculation of early settlement figure is covered by consumer credit legislation and broadly speaking will comprise the capital balance outstanding at the date of request, plus no more than 2 months interest.
I've skimmed over a lot here, but if you need answers to specific finance related questions e.g. verifying an early settlement calculation, please post all HP contract financial info and I and others will try answer.
However before you do so, consider your options. These are:
1. Hand the car back to the HP company.
The HP company will most likely sell the car and apply the proceeds to the balance outstanding, adjusted for the costs of disposal and any interest rebate due on full/partial early settlement. If there is a shortfall they could lodge a claim against your mothers estate, but I'd guess they won't bother if the balance is immaterial and will simply write it off. If there is a surplus I'd imagine they would magic it away through inflated disposal charges (not being cynical
2. If you, or any family member or friend wants the car then there are technically 2 options to acquire it:
2.1 Take over the existing HP contract (subject to HP company agreement).
Ask the HP company to assign the HP contract to the person who is interested in the car. The person will obviously need to be credit approved first as they will be taking over the remaining debt. Note that if the car is worth a great deal more that the amount outstanding you should negotiate an upfront cash adjustment (these negotiations do not involve the HP company, nevertheless the proceeds form part of your mother's estate, so take legal advice if necessary).
2.2 Settle the outstanding HP balance
If the person interested in your car is a cash buyer ask the HP company for an early settlement figure and pay that so you can pass on clear title. Sell the car and recover the settlement amount from the proceeds. The surplus in sales proceeds ought to be included in your mothers estate as stated above. Bear in mind that the calculation of early settlement figure is covered by consumer credit legislation and broadly speaking will comprise the capital balance outstanding at the date of request, plus no more than 2 months interest.
I've skimmed over a lot here, but if you need answers to specific finance related questions e.g. verifying an early settlement calculation, please post all HP contract financial info and I and others will try answer.