Selling car to a friend using finance?

[Babw]

I have a bit of a dilemma.

I'm selling my E46 M3 to make space for a GTR. A good friend has made clear his intentions to buy it but he can't come up with the all of the capital.

Is there any sensible way to arrange monthly payments without resorting to finance? A simple contract of some sort?

At the moment I don't need the funds from the M3 sale for purchasing the GTR but I'd like to get the amount settled with 12-18 months max.

Appreciate the help.

[Simpo Two]

You can draw up a 'loan note' detailing the payments and terms. That would act as a contract so you can sue him if it goes wrong. But it might be less risky to ask him to get a bank loan instead so you get paid in full on day one - it's up to you and your 'risk profile'!

[megaphone]

Do you trust your friend? If so just agree an amount and payments. If you don't, tell him you'll transfer ownership and V5 once he's paid in full.

[mcbook]

This might seem harsh but any informal agreement sounds like a recipe for disaster.

If he hasn't got the cash and can't get a bank loan I would politely tell him that you can't do the deal. As another option, he could always get the cash from a credit card and then do a 0% balance transfer.

Basically, I don't think you should take on any risk and it would be unreasonable of him to expect you to. Let him (or the bank) assume the risk and give you cash if he wants the car.

[littlebasher]

When it comes to money, trust nobody.

You'll get fked over, it's not worth it

[SpeckledJim]

Crazy, crazy, crazy idea.

[DanL]

Never lend a friend money unless you're prepared to lose the money and the friend.

What happens if you fall out in six months time because it needs a new clutch (or whatever) and your friend tells you that you've sold him a lemon and he's not paying anything more for it? Hopefully unlikely, but you need to consider this sort of thing.

If your friend can't finance the car, he can't afford it.

[t400ble]

Tell him to grab a bank loan

Never lend anyone anything

[hornetrider]

Babw said:

I have a bit of a dilemma.

I'm selling my E46 M3 to make space for a GTR. A good friend has made clear his intentions to buy it but he can't come up with the all of the capital.

Is there any sensible way to arrange monthly payments without resorting to finance? A simple contract of some sort?

At the moment I don't need the funds from the M3 sale for purchasing the GTR but I'd like to get the amount settled with 12-18 months max.

Appreciate the help.

Tell him to get a loan. Any kind of agreement between you is a very bad idea - there dragons be.

[SpeckledJim]

hornetrider said:

Babw said:

I have a bit of a dilemma.

I'm selling my E46 M3 to make space for a GTR. A good friend has made clear his intentions to buy it but he can't come up with the all of the capital.

Is there any sensible way to arrange monthly payments without resorting to finance? A simple contract of some sort?

At the moment I don't need the funds from the M3 sale for purchasing the GTR but I'd like to get the amount settled with 12-18 months max.

Appreciate the help.

Tell him to get a loan. Any kind of agreement between you is a very bad idea - there dragons be.

Exactly. When it's upside down in the canal on the first weekend and his insurance company tells him it's worth £5k less than he owes you, it'll become your problem, not his.

[DanL]

t400ble said:

Tell him to grab a bank loan

Never lend anyone anything

Indeed. To rephrase what I said earlier - if a bank (who are supposed to be the experts in lending and assessing risk) aren't willing to lend your friend money, why on earth would you take on that risk?!

[Flip Martian]

What they all said. Money up front every time. No offence can be caused by asking for all the money up front. If he wants it its his responsibility to give you the agreed price.

[Babw]

I'm completely aware of the pitfalls and wouldn't have put up this post if I felt comfortable.

I just want to make sure I had explored all possible avenues but really the bank loan aspect with the current low finance rates seems to be the answer for him.

[Flip Martian]

Totally. There's never been a better time to borrow than at the moment. M & S bank were offering 3.6% this week apparently.

[red_slr]

I would really think twice about selling a car to a friend.
You want to be able to hand the keys over and never see it again.
What if it throws a rod a week later.