Outstanding finance on potential purchase

-maccer-

Hi,

I spotted a car I liked the look of in the last few days and contacted the seller. I asked him was there outstanding finance on the car and he said "that will not be a problem for you". He was not a native english speaker and had used similar phrases to this during the conversation so I thought he mean't there was no finance on the car. I subsequently ran a check on the vehicle and discovered that the vehicle is currently subject to a finance agreement (this has been confirmed by the carchecking website with the financial institution involved as of today). I will call the seller in a while to speak to him about it but wouldn't mind some extra information before I speak to him.

What I am wondering is does the financer not usually hold the registration certificate of the car preventing him from selling it?

Could it be possible that I just pay the loan off and the car is signed over to me.

Obviously if the guy says he will just sell me the car and then payoff the loan I will be running a mile.

Has anyone else been in a similar situation and seen a good outcome, whereby you get the car and the loan is repaid. Is this a common situation?

My gut instinct is just telling me to walk away from this situation!

Thanks for the responses.

Anan1

Two possible solutions:

1. He clears the finance, gets you proof of this in writing, you buy the car.

or

2. You get two drafts, one for the finance company, one for him.

-maccer-

Anan1 wrote: »

Two possible solutions:

1. He clears the finance, gets you proof of this in writing, you buy the car.

or

2. You get two drafts, one for the finance company, one for him.

Thanks for the quick clear response. From speaking to him he sounds pretty cash strapped so I would say option one would be out.

Is option two a normal occurence? Do you know people who have bought a car in this way? Do you think I would be able to speak to the finance company myself and discuss it with them?
Thanks

Anan1

I know it's possible - i've heard of it being done, but i've never done it myself. Hopefully someone with more information will be along shortly.:)

Pkiernan

With the current market for used cars, there are many other options for you.

I'd walk away to be honest, it is just going to be trouble.

-maccer-

Anan1 wrote: »

I know it's possible - i've heard of it being done, but i've never done it myself. Hopefully someone with more information will be along shortly.:)

Yeah it seems totally logical but sounds a bit complicated when I am dealing with two different parties. God knows how much this guy owes on the loan as well!

-maccer-

Pkiernan wrote: »

With the current market for used cars, there are many other options for you.

I'd walk away to be honest, it is just going to be trouble.

Ha, that is exactly what my gut is telling me to do!

bazz26

You ask the seller to get a settlement figure from the Finance Company or Bank. You both agree to go into the Finance Company or Bank. You pay them what they are owned on the car (assuming it is equal or less than the agreed purchase price). You then ask the Finance Company or Bank to give you an offical document or letter showing the loan is settled in full and there is no outstanding finance on the car. You then pay the seller the balance, (purchase price less what you paid the finance company) if any.

If the seller doesn't agree to the above or you find the above too daunting or complicated then the best thing to do is forget that car and find a car which has no outstanding finance on it.

Whatever you do, don't pay the seller directly on the promise that they will clear the outstanding finance, as legally the car is secured against the load so it is the property of the finance company or bank until the final payment is made.

L-M

The worst of the lot is if he is cash strapped and has got finance, he may actually owe a good bit more than what the car is worth with the recent decline in the market.

A few simple steps:

1. Find out how much he owes.

2. If it's much more than what the car is worth, ask the seller is he in the financial situation that he can pay off the outstanding balance, after you have paid off what ye agreed. If it's less than the car, well then everything is more or less hunky dory, just discuss it with his bank first.

Just be very careful, don't hand him any money until that finance is cleared because it follows the car, not whom ever took it out in the first place.

-maccer-

Update:

Just spoke to the seller there. Told him I knew there was a loan outstanding on the vehicle. First off he pretended he didn't understand what I was saying and then he admited yeah there was some amount still owing on it that would be no problem he would pay it off. I said fair enough was he willing to pay off this amount before I bought the car and he laughed and said he would pay it later (as in after I paid for the car). I said that that wouldn't be acceptable to me and he just said ok and goodbye. Well worth getting the car check done anyway that is for sure. Thanks to everyone for the responses.

L-M

-maccer- wrote: »

I said that that wouldn't be acceptable to me and he just said ok and goodbye. Well worth getting the car check done anyway that is for sure. Thanks to everyone for the responses.

Definitely trying to get away with a sum of finance there! Fair play OP for doing the checks!

mickdw

-maccer- wrote: »

Update:

Just spoke to the seller there. Told him I knew there was a loan outstanding on the vehicle. First off he pretended he didn't understand what I was saying and then he admited yeah there was some amount still owing on it that would be no problem he would pay it off. I said fair enough was he willing to pay off this amount before I bought the car and he laughed and said he would pay it later (as in after I paid for the car). I said that that wouldn't be acceptable to me and he just said ok and goodbye. Well worth getting the car check done anyway that is for sure. Thanks to everyone for the responses.

What a chancer.