Mouser

I am considering buying a car which I know has outstanding finance for my son (owner has told me so). The owner was honest enough about the outstanding finance but I was wondering what would happen if I purchased the car and the repayments weren't met.
Any thoughts or advice on the above appreciated.

Luminous

iTrader: (3)

There are a few ways that you can cover this.

1) Personally, I would make a deal on the price that you think that the car is worth.
2) Contact the loan company to agree what the oustanding balance is (you will need the seller's authority to do this)

Then deduct that amount from the purchase price of the car, and settle the finance yourself. That way you know that it has been paid.

Also, wait for others to suggest their ideas

rik1471

That's the best way IMO

Chrisgr31

Only problem is how does the original owner know you are going to pay the finance off?

Therefore you do as above, and give the current owner the cash for the balance and you place the draft for the finance company in an evelope and post it to them in the company of the original owner.

Mouser

Thanks for the replies everyone. Perhaps buying from a garage is a safer option.
Regards,
Mouser.

GC8

The law is straightforward; if you buy it believing that the finance has been settled, or you buy it in ognorance then you will obtain good title to the car. The law will offer you no protection if you buy the car knowing that there is still an outstsanding balance to be paid.

Hope that this helps.


Simon

Luminous

iTrader: (3)

You make that agreement with the finance company with the original owner present.

talizman

iTrader: (1)

Mouser,

I sold a car with finance not long ago and this is what I did.....

I agreed a figure with the buyer for the car and the settlement figure was £1500 less than the sale price.

I phoned the finance company in the presence of the buyer and informed them that the buyer would be settling the loan.

I then handed the phone to the buyer who settled the finance by switch.

The buyer came back that night with the balance, £1500 and I phoned the finance company to ensure that payment had beed received and hadn't bounced. Upon confirmation of this, I handed the keys over.

Much easier than it probably sounds!

MikeCardiff

iTrader: (2)

Tell the seller to settle the finance first, then you'll buy the car - TBH there are plenty of cars around and having the added hassle and possible pitfalls for sorting out someone elses debt ? then I wouldnt bother.

Mouser

Sound advice guys. Thanks again.
Regards,
Mouser.

Silver Knight

If they had the cash to do that they wouldnt have finance in the first place!!

talizman

iTrader: (1)

My thoughts exactly....

There is nothing simpler than the buyer settling the finance directly with the finance company.

Don't be put off by scare-mongering! If its a good car, don't miss out on it just because its on hp

MikeCardiff

iTrader: (2)

Exactly, so unless the car is really cheap or rare, chances are you're going to find something pretty much identical without all the added hassle - esp this time of year there are loads of cars around so why give yourself more of a headache when you dont need to.

Also, consider this - the seller cant afford to pay of the finance outstanding on the car, and is probably selling because he's skint, so how do you know he could afford to run and maintain if properly ?

The Zohan

Yes, spot on advice imho!

talizman

iTrader: (1)

Mike,

2 points...

1) "all the added hassle".....
Its probably easier to buy a car on finance than one without.
Say I'm buying a car from you, you'll want me to bring £x amount of cash along, yes? There are risks involved with this, as you are no doubt aware.
I'd rather not carry thousands, possibly tens of thousands of pounds of cash.
Bankers draft? We all know that they are completely insecure these days due to forgeries, so seller will still want to wait a few days for clearance.
Or, do you want a cheque? Then I can collect the car in 3/4/5 days, or whatever? Hassle!

If I pay the finance co. by switch/credit card, they can tell the seller IMMEDIATELY that the car can be released.
No carrying huge amounts of cash.
No waiting for cheques to clear.
1 phone call.
Confidence that HP is settled.

and

2)"the seller cant afford to pay of the finance "
You think that the only reason for selling a car on finance is because the seller can't afford the car and/or the running costs?
A tad narrow minded don't you think?
If I have a car with finance and I decide to change it and don't want to p/ex, then my only choice is to sell.
Now, I may not have £10k cash lying around in the bank to settle the finance with, but that doesn't mean that I can't afford the running costs or that the car has been neglected!
Would you prefer I went out and got a £10k loan to free the car from HP, and then sold for £10k cash, just to settle my loan which has now accrued interest? Repay god knows how much, perhaps £10,500+?
To suggest that a person selling a car on HP is "skint" is ludicrous!

T