I appreciate your concerns guys. I really like this forum - a lot more helpful than the RX8 forum I was at
Anyway, I just phoned up the finance company. I have been reassured by the guy I spoke to - thats the number I got from the HPI that is. Anyway I was asking him what the best way to do this trasnaction:
Basically, the first thing is that they don't need to be informed that he is selling the car as long as they get the final balance settled. He then said that the best way is for him to pay the shortfall FIRST, then I can pay the £26k or whatever via bank transfer to the fiance company's account. Once they get the monies (which will normally be instant/ about 30 minutes), they can send a confirmation email to both of us to let us know the HPI is clear. Should there be any problems with the V5 etc, the finance company can REFUND me the monies (obviously after checks etc.) So I think it seems safe. The guy I spoke to on the phone seems to think it will be OK as they will refund me the monies if there was a scam etc.