When an asset is being taken as security against finance, it is important for both parties to be confident of ownership. This is particularly important when the asset in question is a vehicle. Most financial institutions that provide asset finance register their goods with agencies that provide information regarding ownership. This benefits both parties: the hirer and the finance house. The most well-known register used by Finance Houses, which is available to the public, is the Hpi (Hire Purchase Information). For a small charge, you can use the Hpi to check whether the goods are already registered on finance, and to check if a vehicle has had an insurance loss registered against it, or if it has been stolen.
This information is only available if the current owner provides Hpi with the relevant information to add to their register. If the asset shows as being on finance, the register will also show an accompanying agreement number, the date it was registered, and a telephone number for the owner. It is very common to have to liaise with the current finance house to obtain a clearance letter from them before further finance can be secured against the asset. Once a finance house has taken an asset as security, the information is uploaded to Hpi so that anyone else can check the asset on the register. The register can hold data against anything that has an identification number, and it is sensible to register all types of assets, not just vehicles. If finance is already showing against an asset, it is imperative that the current outstanding finance is settled prior to any further finance being provided against it, otherwise funds may get released but title would not have passed. This can be catastrophic for both the finance house and the hirer.
With so much fraud around today, the use of trackers is becoming increasingly commonplace. Trackers are favourable for both the finance house and the hirer. From the finance house’s point of view, it provides comfort that the asset that has been financed can be tracked at any point during the term of the agreement. From the hirers point of view, it can provide a reduction in insurance costs as well as enabling the owner of the business to also track their assets. This is particularly beneficial for employers with a large workforce that may work away from the office quarters. The cost is relatively small in comparison with the cost of the asset, and can in some instances be a condition of the underwriting, especially on specialised large items of plant or high value sports cars.
With nearly all types of finance agreements, it is a condition of the terms that fully comprehensive insurance is taken out on the goods. Some finance providers will ask for proof of insurance and some may request that they are noted on the insurance policy as the beneficiary, should a claim be required. If a claim has been made for a total loss, then the finance provided against that asset should be settled immediately.