PM wrote:

A couple of years ago they borrowed £5k from Miss A's parents to buy a car.
This was a verbal agreement; none of the money has been paid back. This is a
major bone of contention - the parents want their money. It is unknown
whether there is a receipt for the car.

Well, so much is going to depend on the non-existent contract that I see
this turning into another Jarndyce and Jarndyce. Mr ******* could well
argue that Miss Ass entered into the loan agreement, not him or that it
was a joint loan or indeed that it wasn't a loan it was a gift.

Miss Ass is deminstrating why co-habitation is fraught with problems and
why lending money to someone without a written agreement is a really
silly idea. As usual, there's also an element of post relationship anger
and Parents Gullible no doubt what to hurt Mr ******* for the insult and
outrage to Daughter Miss Ass.

They are possibly also stuck with the problem that the car is no longer
worth £5k.

They need proper legal advice, they may have legal cover on their house
insurance. But I suspect they'll get told it's not worth pursuing.