Opinion needed on buying car with outstanding finance.

irishpumpkin

Hi there,

I'm a first time car buyer and I've ended up in an bizarre situation that I explain now.

I went to a car dealer to see/test drive the car. I was happy with it and decided to go ahead and pay a deposit for it (rookie mistake I know). It was after the fact that I got a cartell report showing the car had outstanding finance. So I called back the dealer to tell him about that.
The dealer admitted he did not know that was the case, and told me the car had be traded in by a local lady. He contacted the lady and found out that there's indeed an outstanding amount to be paid. But there was nothing he could as the finance company can only deal with the person who took on the loan.
At the point he said the only thing he can do is to give me an invoice stating that in the event of the car being repossessed by the finance company he would refund me the full amount I paid for the car.

All of this is just messy and bizarre. I've been reading a lot about this topic and I infer from other cases that the dealer should not be selling the car in the first place, as the finance company is the actual owner.

So my question is, that solution he is suggesting, the invoice with a clause for refunding me the money in case of repossession. Has anybody heard of something similar? What sort of legal validity does that have?

At this point I've made my mind, 98% I won't be buying that car until I see a paper showing a settlement agreement. But I figured there was no harm in listening other people's opinions.

Drummerboy08

Walk away from it unless the finance has been cleared and can be proven.

coylemj

irishpumpkin wrote: »

At the point he said the only thing he can do is to give me an invoice stating that in the event of the car being repossessed by the finance company he would refund me the full amount I paid for the car.

'In the event of the car being repossessed' - like it may or may not happen? That is complete nonsense, the finance company will come and seize the car, there's no 'in the event .....' about it.

No way did he not know that there was finance outstanding, he was hoping to offload it on you and when the finance company came and seized it, he would have washed his hands of it. He's a crook, plain and simple.

Bogwoppit

That is highly irresponsible at best, criminal at worst.
This dealer should be named and shamed.

blingrhino

will he refund your deposit ?

irishpumpkin

coylemj wrote: »

'In the event of the car being repossessed' - like it may or may not happen? That is complete nonsense, the finance company will come and seize the car, there's no 'in the event .....' about it.

No way did he not know that there was finance outstanding, he was hoping to offload it on you and when the finance company came and seized it, he would have washed his hands of it. He's a crook, plain and simple.

Well, that was what I thought but he kept saying "the lady is making the monthly payments".

Regarding the car, the only reason why I haven't completely walked away is because it's the car I'm looking for and there's none with similar specs available in the area I live in.

I don't mind not getting the deposit back, that's my mistake and I assume it. I still find astonishing though how exposed buyers are to this kind of scam (can I use that word?). If dealers keep doing this practice is because they are well aware they have little or nothing to lose.

ShaunieVW

Walk away, sounds like he's spinning you one tbh, not worth the risk. He should refund your deposit too giving the situation that he is at fault and you expect a car without outstanding finance.

Drummerboy08

It's actually not his or the lady in question's car to sell.

It still belongs to the finance company.

tipparetops

get your deposit back, best not to have any dealings with the dealer again.
you will have to get tough and tell the dealer you want your cash now.
The key is to do it now, not some time into the future.
Go to the dealer today.

They will have to give you your deposit back, as the car was not theirs to sell to you.

coylemj

The only way you can safely buy that car is to find out which finance company is involved, get the previous owner to pay off the loan in full and get a letter from the finance company saying that they relinquish all title to the car, only then can you safely buy it.

Otherwise if she stops making the payments, the finance company will come and take it away.

Fozzie Bear

A friend of mine sold his car a couple of years ago. He had bought it brand new on finance but due to changed circumstances had to sell.

He was straight up about this with the lady who bought it. First he went to the finance company, got a statement of of the amount outstanding and showed it to the buyer. He then got the necessary paperwork from the finace company to clear/payoff the debt, signed it all and handed it over to the buyer. She put it in the post to the finance company along with a cheque to clear the outstanding amount and sent it off. Peace of mind for her knowing the debt was cleared and my mate sold his car and payed off his finance.

If you were to go through with this purchase (and I'm not saying you should) then I would be insisting on something along the above before I'd be happy. The seller sounds like a right chancer.

keysersoze0330

Do dealers buy cars or take in cars without doing these checks? I don't think so. I'd be getting my deposit back TODAY op.

GavMan

irishpumpkin wrote: »

I don't mind not getting the deposit back, that's my mistake and I assume it. I still find astonishing though how exposed buyers are to this kind of scam (can I use that word?). If dealers keep doing this practice is because they are well aware they have little or nothing to lose.

Why in the name of God would you forego your deposit? You're entitled to it back

coylemj

keysersoze0330 wrote: »

Do dealers buy cars or take in cars without doing these checks? I don't think so. I'd be getting my deposit back TODAY op.

I believe some dealers do offer cars for sale which have finance outstanding but it's done on the basis that the dealer will pay the finance company the outstanding loan so that it's sold to the buyer debt-free. There are cases where the previous owner will ask a dealer to sell a car, pay the outstanding loan and return any surplus minus his commission.

The dealer in such circumstances would typically be reluctant to appraise the prospective buyer with the details for fear of putting them off but in a lot of cases (not this one!) it's all done by the book and the buyer isn't aware of what's happening in the background.

What seems to be happening here is that the dealer expects the OP to buy the car on the basis that the previous owner will continue to pay the loan, an arrangement that any sensible person would run a mile from.

irishpumpkin

coylemj wrote: »

What seems to be happening here is that the dealer expects the OP to buy the car on the basis that the previous owner will continue to pay the loan, an arrangement that any sensible person would run a mile from.

That's exactly the case.

Thanks everyone who has replied so far, I mentioned I had made up my mind 98% and now I can say I'm 100% not getting it.

May this post serve as a warning for any other potential unaware first buyers out there.

Lesson learned.

coolisin

Ehhhh,

I may have missed it but you are getting your deposit back right?

irishpumpkin

coolisin wrote: »

Ehhhh,

I may have missed it but you are getting your deposit back right?

I meant I'm not getting the car....

I will ask for a deposit refund, as I have a proper receipt from the seller.

irishpumpkin

coolisin wrote: »

Ehhhh,

I may have missed it but you are getting your deposit back right?

I meant I'm not buying the car....

I will ask for a deposit refund, as I have a proper receipt from the seller.

coolisin

Ah good!
Was worried you where not standing your ground.

Glad your walking away.

BigEejit

If they give hassle about the deposit I would just go to the small claims court.....

porsche boy

Walk, no run away from this. What ever he writes on an invoice means nothing if he has closed down. He'll refund you the money?? Will in his arse!!!! That is a scam.
I don't know of any garages, main dealer or not that dosent run a cartell or Motorcheck report on a possible trade in. You can actually buy a yearly subscription for those sites to make it easier on the dealers.

Bogwoppit

As I said before, name and shame (after you get the deposit back).