Buying A Car With Outstanding Finance...
Discussion
I have arranged to view a car which has outstanding finance on it at the moment (hpi check comfirms)- it belongs to the owner of the garage in question and he is selling it via his own garage.
Other than the finance the car has no issues- low owner, low miles, FSH, serviced in August and has extended transferable OEM warranty with close to a year remaining.
It's competitively priced for the spec/miles and looks to be a clean car.
I have never bought a car on finance, or bought a car with finance outstanding, the whole process seems a bit unclear and with various potential risks and uncertainties (some of them are worse case scenarios I'll admit) for the buyer.
Can someone who has bought/sold a car like this provide some insight and explain how you did this, and what the best way is to ensure peace of mint and eliminate the risk, or is it something you should only do with a person/garage you know very well?
As I understand it, the current owner has to get a 'final settlement' amount from the finance company and then pay it off prior to sale or the buyer to pay it directly to the finance company. The owner has in this case has said he will have this agreement to show me, and has offered to clear the finance himself in my presence after I pay a deposit on the car- or for me to pay the company directly.
If I do the latter, how can I ensure he is legally bound to then actually sell me the car, as I have essentially just cleared his finance for him?
Sorry if that's a silly question but I really have no experience in buying a car like this....
Thanks in advance for any advice
Other than the finance the car has no issues- low owner, low miles, FSH, serviced in August and has extended transferable OEM warranty with close to a year remaining.
It's competitively priced for the spec/miles and looks to be a clean car.
I have never bought a car on finance, or bought a car with finance outstanding, the whole process seems a bit unclear and with various potential risks and uncertainties (some of them are worse case scenarios I'll admit) for the buyer.
Can someone who has bought/sold a car like this provide some insight and explain how you did this, and what the best way is to ensure peace of mint and eliminate the risk, or is it something you should only do with a person/garage you know very well?
As I understand it, the current owner has to get a 'final settlement' amount from the finance company and then pay it off prior to sale or the buyer to pay it directly to the finance company. The owner has in this case has said he will have this agreement to show me, and has offered to clear the finance himself in my presence after I pay a deposit on the car- or for me to pay the company directly.
If I do the latter, how can I ensure he is legally bound to then actually sell me the car, as I have essentially just cleared his finance for him?
Sorry if that's a silly question but I really have no experience in buying a car like this....
Thanks in advance for any advice
Chad Hugo. The law. If you buy a car from a private punter and then find out AFTERWARDS that the car is on finance, the finance company will, in the first instance, pursue the seller for the amount outstanding and if they have no luck with him/her, may well then pursue you. It depends on the outcome of the first course of action by the finance company.
If you buy a vehicle from a REGISTERED car dealer, (VAT number and a registered car dealer name etc.), then that dealer is liable for any outstanding finance, on any vehicle in his possession, and not you. You are viewed as an innocent party and the dealer ALONE will be pursued for any outstanding monies.
If you buy a car from a dealer masquerading as a private seller, (there are many out there), and the vehicle turns out to be financed, then you will have a fight on your hands. The essence of my statements above are that YOU SHOULD ALWAYS DO YOUR RESEARCH.!!!!!!!
Buying a car from a dealer will almost always cost the most, but will also have all the safeguards built in to protect you. Buying a car privately will often be cheaper but come with potential hazards attached.
If you buy a vehicle from a REGISTERED car dealer, (VAT number and a registered car dealer name etc.), then that dealer is liable for any outstanding finance, on any vehicle in his possession, and not you. You are viewed as an innocent party and the dealer ALONE will be pursued for any outstanding monies.
If you buy a car from a dealer masquerading as a private seller, (there are many out there), and the vehicle turns out to be financed, then you will have a fight on your hands. The essence of my statements above are that YOU SHOULD ALWAYS DO YOUR RESEARCH.!!!!!!!
Buying a car from a dealer will almost always cost the most, but will also have all the safeguards built in to protect you. Buying a car privately will often be cheaper but come with potential hazards attached.
Thanks, It is a dealer- has a website advertising as such, advertises on PH and autotrader. Currently has 35 cars listed for sale on the latter and has a showroom visible on google street view with physical address, so it's not some bedroom sole trader operation.
I do know about the finance (hence the thread) seller has discussed it with me, so it's not a case that I can plead ignorance of it, I did an HPI check also which revealed it.
My main concern was with the process of buying itself and how it should be done practical to avoid any potential problems/risks?
For example, pay deposit via cc, dealers seller clears finance, and then I pay the full agreed amount to him, or I pay the finance company directly and then pay any remaining £ to the seller etc?
I'm sure it's quite a common situation as above certain price point it seems a lot of cars have some form of finance on them?
I do know about the finance (hence the thread) seller has discussed it with me, so it's not a case that I can plead ignorance of it, I did an HPI check also which revealed it.
My main concern was with the process of buying itself and how it should be done practical to avoid any potential problems/risks?
For example, pay deposit via cc, dealers seller clears finance, and then I pay the full agreed amount to him, or I pay the finance company directly and then pay any remaining £ to the seller etc?
I'm sure it's quite a common situation as above certain price point it seems a lot of cars have some form of finance on them?
Edited by Chad_Hugo on Saturday 4th October 14:43
Speak to the finance company. Name and telephone number should be on the HPI report.
Ask them if its ok for you to pay via debit card over the phone on pick up day. If it is, then just do that and pay the seller the balance.
If not, the seller has offered to pay in your presence, you can always talk to the finance co at the end of the process to confirm. To be honest it sounds as if you have nothing to worry about here.
Ask them if its ok for you to pay via debit card over the phone on pick up day. If it is, then just do that and pay the seller the balance.
If not, the seller has offered to pay in your presence, you can always talk to the finance co at the end of the process to confirm. To be honest it sounds as if you have nothing to worry about here.
The finance company in question is Lombard North Central who appear to provide financial services to business and for fleets of cars rather than individuals wanting to insure one single vehicle- perhaps reassuring as the garage may well have more of there cars with on finance with this same company so they would be unlikely to attempt anything dodgy as they rely on them to buy cars/sell?
I will try and speak with them tomorrow and see how payment can best be handled.
One thing I am unsure of- if I pay the finance what guarantee is there that the seller of the car will then sell the car to me? There would still be a small amount to pay to him as well, isn't there a risk in the seller potentially refusing to sell so he can get the full amount from someone else having the finance cleared by me? Is there some sort of contract for situations like these?
I was thinking of placing a deposit via credit card, then the seller paying of finance and one I have written confirmation from Lombard that they have no interest in the car anymore paying him in full, or is it better to pay them direct if possible?
I realize that Hpi can be slow to update there records so even after this is done, it could take 2-4 weeks or more for it actually to be taken off hpi as on finance.
I will try and speak with them tomorrow and see how payment can best be handled.
One thing I am unsure of- if I pay the finance what guarantee is there that the seller of the car will then sell the car to me? There would still be a small amount to pay to him as well, isn't there a risk in the seller potentially refusing to sell so he can get the full amount from someone else having the finance cleared by me? Is there some sort of contract for situations like these?
I was thinking of placing a deposit via credit card, then the seller paying of finance and one I have written confirmation from Lombard that they have no interest in the car anymore paying him in full, or is it better to pay them direct if possible?
I realize that Hpi can be slow to update there records so even after this is done, it could take 2-4 weeks or more for it actually to be taken off hpi as on finance.
Pay deposit via cc.
Ask seller to clear finance.
Obtain proof that it has been cleared.
Pay balance to seller.
HPI will be slow to update. But as long as you have the above then it should be no different to buying a car with no finance outstanding on it.
Sometimes the HPI checks give the agreement number. If it does check this corresponds to the agreement letter on the letter of no further interest from the finance co.
Ask seller to clear finance.
Obtain proof that it has been cleared.
Pay balance to seller.
HPI will be slow to update. But as long as you have the above then it should be no different to buying a car with no finance outstanding on it.
Sometimes the HPI checks give the agreement number. If it does check this corresponds to the agreement letter on the letter of no further interest from the finance co.
Thanks- I will speak to the finance company.
I have their details and agreement date, not the exact policy number, but I can do a more detailed check via hpi site itself if needs be.
I think the above method seems the best for me personally.
I know hpi register will take a while to clear it, that I don't mind as the car would be a keeper for me anyway so I don't intend to sell short term at all.
I have their details and agreement date, not the exact policy number, but I can do a more detailed check via hpi site itself if needs be.
I think the above method seems the best for me personally.
I know hpi register will take a while to clear it, that I don't mind as the car would be a keeper for me anyway so I don't intend to sell short term at all.
I can't imagine Lombard will tell you anything due to data protection as it's not your finance agreement with them.
When I sold a car with finance on, I made the payment infront of the buyer over the phone to the finance company where they confirmed payment and verbally that the finance was clear so both parties were happy.
When I sold a car with finance on, I made the payment infront of the buyer over the phone to the finance company where they confirmed payment and verbally that the finance was clear so both parties were happy.
Gassing Station | General Gassing | Top of Page | What's New | My Stuff