Selling a car with Hire Purchase finance outstanding
Discussion
Hi fellas,
My car is up for sale and still has finance owing on it as I bought it via HP and am only part way through the term of the finance.
I have a buyer very interested who lives a long way away. The purchase price we have loosely agreed would almost wipe out the outstanding finance, with a few hundred quid extra for me to settle. So far, so simple.
Problem is, that new buyer wants to pay the money straight to the finance company to ensure the finance is cleared. If she doesn't then she has no guarantee that I would clear the finance which is attached to the car.
The finance company report that if she transfers the funds to them, it would take 48 hours to clear in their account even if sent via CHAPs.
Therefore this would mean if the new buyer views and wishes to take the car, even if she sends the funds that day via her bank, I will have no confirmation that the finance company have received the money until a few days later.
Therefore she would effecitvely be collecting the car and driving it away before I have confimation the funds have been safely received.
How have people dealt with this scenario in the past when selling cars private with HP attached?
Sorry for the boring post by the way - just hoping for some input from those that have encountered a similar scenario...
My car is up for sale and still has finance owing on it as I bought it via HP and am only part way through the term of the finance.
I have a buyer very interested who lives a long way away. The purchase price we have loosely agreed would almost wipe out the outstanding finance, with a few hundred quid extra for me to settle. So far, so simple.
Problem is, that new buyer wants to pay the money straight to the finance company to ensure the finance is cleared. If she doesn't then she has no guarantee that I would clear the finance which is attached to the car.
The finance company report that if she transfers the funds to them, it would take 48 hours to clear in their account even if sent via CHAPs.
Therefore this would mean if the new buyer views and wishes to take the car, even if she sends the funds that day via her bank, I will have no confirmation that the finance company have received the money until a few days later.
Therefore she would effecitvely be collecting the car and driving it away before I have confimation the funds have been safely received.
How have people dealt with this scenario in the past when selling cars private with HP attached?
Sorry for the boring post by the way - just hoping for some input from those that have encountered a similar scenario...
GC8 said:
For the purchaser, it wouldnt make any difference whether you paid, or simply assured her that you would pay and then didnt.
She would still have good title and she would own the car. The finance company wouldn't be very happy with you if you did, of course.
AFAIK you can't sell a car under finance without the company's consent. That's illegal. It's always a big hassle selling a car with outstanding finance unless it's to a trader...She would still have good title and she would own the car. The finance company wouldn't be very happy with you if you did, of course.
I have done this several times, both buying and selling. The way I did it was this. On the day of the sale you phone up the finance company. The buyer pays off the outstanding finance with a debit card over the phone in front of you. This way you both know it's been paid off. Get the finance company to email/fax you confirming it no longer has a financial interest in the vehicle. If the car is worth more than the finance then the buyer gives you the rest in cash.
Obviously you would need to get a settlement figure a day or two previously so that the buyer would know how much cash to bring etc.
Obviously you would need to get a settlement figure a day or two previously so that the buyer would know how much cash to bring etc.
Edited by Pugland53 on Wednesday 23 January 22:17
Downton Mini said:
When we brought our Golf we brought privatly it still had finance outstanding they seller had said he would pay it off we agreed a deal he sent use the confimration that it had been cleared nice and easy deal to be fair.
Yes, this is if the seller agrees to clear finance before the sale ...Morning fellas, thanks for taking the time to respond.
There is about £10k finance outstanding on my car and I don't have the reddies to hand to pay it all off before the sale without the purchase proceeds from the buyer.
I think the idea of the new buyer making a card payment to the finance company over the phone sounds agreeable. Once the payment has been approved, there would be no way for her to recall it or cancel it as far as I am aware. However I suppose it would be prudent to ask for proof that she has the liquid funds in her account prior to the call.
The buyer seems perfectly decent but just want to be careful where £10k is concerned!
Also a special thank you to Scorcher for your particularly helpful attitude.
There is about £10k finance outstanding on my car and I don't have the reddies to hand to pay it all off before the sale without the purchase proceeds from the buyer.
I think the idea of the new buyer making a card payment to the finance company over the phone sounds agreeable. Once the payment has been approved, there would be no way for her to recall it or cancel it as far as I am aware. However I suppose it would be prudent to ask for proof that she has the liquid funds in her account prior to the call.
The buyer seems perfectly decent but just want to be careful where £10k is concerned!
Also a special thank you to Scorcher for your particularly helpful attitude.
She could charge it back - its hardly secure from your point of view. A bank transfer would be better, and better still to you and from you to them.
Doubtless she will be reluctant to do this, but as my earlier posts suggests, she will own the car. Its a myth that cars sold with finance to private buyers can be repossesed by finance companies (since the mid sixties, at any rate).
Doubtless she will be reluctant to do this, but as my earlier posts suggests, she will own the car. Its a myth that cars sold with finance to private buyers can be repossesed by finance companies (since the mid sixties, at any rate).
Alfa159Ti said:
Morning fellas, thanks for taking the time to respond.
There is about £10k finance outstanding on my car and I don't have the reddies to hand to pay it all off before the sale without the purchase proceeds from the buyer.
I think the idea of the new buyer making a card payment to the finance company over the phone sounds agreeable. Once the payment has been approved, there would be no way for her to recall it or cancel it as far as I am aware. However I suppose it would be prudent to ask for proof that she has the liquid funds in her account prior to the call.
The buyer seems perfectly decent but just want to be careful where £10k is concerned!
Also a special thank you to Scorcher for your particularly helpful attitude.
Why sell the car?There is about £10k finance outstanding on my car and I don't have the reddies to hand to pay it all off before the sale without the purchase proceeds from the buyer.
I think the idea of the new buyer making a card payment to the finance company over the phone sounds agreeable. Once the payment has been approved, there would be no way for her to recall it or cancel it as far as I am aware. However I suppose it would be prudent to ask for proof that she has the liquid funds in her account prior to the call.
The buyer seems perfectly decent but just want to be careful where £10k is concerned!
Also a special thank you to Scorcher for your particularly helpful attitude.
If you have made over half of the payments you can just return the car to the finance company and have nothing more to pay. (You alluded in your first post that the sale price wouldn't cover the full amount)
Seems strange to want to lose money plus the mucking about with the buyer etc.
(unless you still have the majority of payments left to make, of course. But then I'd still consider speaking to the finance company about handing it back)
Hi in your terms and conditions there will be set months that you can end the HP early, there usually is also a Voluntary termination option which happens halfway through your agreement.
You shouold really phone up the finance company you are paying back for more clarification though! It has no effect on your credit rating.
You shouold really phone up the finance company you are paying back for more clarification though! It has no effect on your credit rating.
V8RX7 said:
I have bought cars this way several times.
The seller has got the details of the finance and I have called them to confirm it's legit.
We have both gone to the bank where I have paid the cash into the finance Co. account.
Simples
^^this.The seller has got the details of the finance and I have called them to confirm it's legit.
We have both gone to the bank where I have paid the cash into the finance Co. account.
Simples
The seller contacts the finance company and gets a settlement figure letter.
You then both go to the bank and you pay the finance settlement figure in front of the seller. You then pay the balance (if there is one) into the sellers account. The finance company can usually confirm receipt/settlement of the account within the hour.
There are potential pitfalls in all private used car sales/purchases, but the above is pretty safe.
Alfa159Ti said:
Hi fellas,
My car is up for sale and still has finance owing on it as I bought it via HP and am only part way through the term of the finance.
I have a buyer very interested who lives a long way away. The purchase price we have loosely agreed would almost wipe out the outstanding finance, with a few hundred quid extra for me to settle. So far, so simple.
Problem is, that new buyer wants to pay the money straight to the finance company to ensure the finance is cleared. If she doesn't then she has no guarantee that I would clear the finance which is attached to the car.
The finance company report that if she transfers the funds to them, it would take 48 hours to clear in their account even if sent via CHAPs.
Therefore this would mean if the new buyer views and wishes to take the car, even if she sends the funds that day via her bank, I will have no confirmation that the finance company have received the money until a few days later.
Therefore she would effecitvely be collecting the car and driving it away before I have confimation the funds have been safely received.
How have people dealt with this scenario in the past when selling cars private with HP attached?
Sorry for the boring post by the way - just hoping for some input from those that have encountered a similar scenario...
Normally the finance company is much more helpful. I know people in the past have effectively done a kind of conference call with the buyer/seller and finance co, and the buyer has made a payment by debit card, so the finance company can see the funds clear immediately. The negative equity should (IMO) be cleared by the seller before hand, so the buyer can clear exactly the remaining balance with the seller on the phone too.My car is up for sale and still has finance owing on it as I bought it via HP and am only part way through the term of the finance.
I have a buyer very interested who lives a long way away. The purchase price we have loosely agreed would almost wipe out the outstanding finance, with a few hundred quid extra for me to settle. So far, so simple.
Problem is, that new buyer wants to pay the money straight to the finance company to ensure the finance is cleared. If she doesn't then she has no guarantee that I would clear the finance which is attached to the car.
The finance company report that if she transfers the funds to them, it would take 48 hours to clear in their account even if sent via CHAPs.
Therefore this would mean if the new buyer views and wishes to take the car, even if she sends the funds that day via her bank, I will have no confirmation that the finance company have received the money until a few days later.
Therefore she would effecitvely be collecting the car and driving it away before I have confimation the funds have been safely received.
How have people dealt with this scenario in the past when selling cars private with HP attached?
Sorry for the boring post by the way - just hoping for some input from those that have encountered a similar scenario...
Don't know why your company is saying 48hrs. If the buyer pays them on debit card they should know instantly.
JM said:
GC8 said:
Would a quite legal hand back like that not make it difficult to obtain finance on a car in future?
No, no reason for it to, is there? Gassing Station | General Gassing | Top of Page | What's New | My Stuff