Buying a car privately with 'outstanding finance'

[Undecided_buyer]

Hi,

Apologies if this has been covered before...

I am looking to purchase a car from a private seller, after we had agreed price etc. he told me that when I HPI check it, it will probably come back with outstanding finance -which it did (Santander)

The seller seems very genuine, and has happily answered all of my questions fully (of which there have been loads!) And everything else on the HPI check is fine.

He is wanting to pay the finance off with the money from the sale (he has stated there is only approx 1.5k left on finance, car sale price around 6k) and that he will do this while I am there, before I take the car away.

Is there a preferred way for this to be done, where I cant lose out, or maybe even best that I pay the finance myself, then when it's confirmed as cleared I pay him the remainder?

The car is a little way from me so I haven't viewed it yet so all of this is dependent on successful viewing and test drive. But it does mean I'll need to do it all on the same day - train there, test-drive etc., sort finance and payment and check they are cleared, and drive home.

Any advice greatly appreciated

Thanks

[MattOz]

When I've bought a car/bike with outstanding finance, I've paid the finance company directly and given the seller the balance. That way, I know there's nothing tying the car to the finance house.

[Ed.]

Seller goes through security questions with finance company then hands phone to you, you pay outstanding balance and both of you can get email confirmation. This is a common process for the finance company.

[Edible Roadkill]

Ed. said:

Seller goes through security questions with finance company then hands phone to you, you pay outstanding balance and both of you can get email confirmation. This is a common process for the finance company.

This, I’ve done it before and it’s probably the only way i would agree to buying something with a finance outstanding

[anonymous-user]

As above, pretty standard practice.

Also, slightly OT and perhaps stating the obvious.. don't allow your 1 way train ticket to lower your standards when you view the car. Be as fussy as you would be viewing a car round the corner from you. Be completely prepared to walk away regardless of how much of a pain it is. I've fallen into that trap before sadly.

[Undecided_buyer]

Thanks for the replies everyone, seems like it shouldn't be an issue then.

I'm going to call Santander to talk it through with them anyway, check how long payments take to clear etc.
I think they said it needs to be a bank transfer when I spoke to them yesterday, but I don't see why they wouldn't take a Debit Card over the phone?

Cheers

[Undecided_buyer]

The sellers idea is he would pay it off while I'm there by card.
But after speaking to Santander, a payment (card or bank transfer) would not clear immediately or even the same day so there is always a chance it won't clear.

So it will have to be as suggested in this thread - I talk to Santander on the day, get the settlement figure, make the payment (apparently would have to be bank transfer), then pay the seller the remainder.

OR he pays it off and has confirmation of a cleared payment before I go which I assume he can't afford.

[Ed.]

My bank blocked the debit card payment attempt due to suspected fraud so I was then given the account details with a reference number instead. Faster payments bank transfer should only take a couple of minutes. They initially said they would email confirmation but after 20 minutes with no response the seller called to chase it up and they found the payment and confirmed over the phone. Email confirmation came a little while later, just before closing.

Taking a day or so to go through seems unhelpfully long, the seller can't let you take it away in case it doesn't go through and you have to trust the seller won't take you clearing finance as a gift.

[Undecided_buyer]

Thanks for the info.

Not sure why they have said it takes so long to clear, but I will try another phonecall to check. They definitely said it needs to be bank transfer, only the account holder can make a card payment apparently.

Seller seems happy to go with me paying finance company direct then the remainder to him anyway.

[PF62]

Edible Roadkill said:

Ed. said:

Seller goes through security questions with finance company then hands phone to you, you pay outstanding balance and both of you can get email confirmation. This is a common process for the finance company.

This, I’ve done it before and it’s probably the only way i would agree to buying something with a finance outstanding

Just had fun (!) with this today.

Had arranged to see a car being sold by a private individual today. No mention by them in our discussions that the car was on finance, although I suppose in retrospect I should have asked.

As the car is some distance and I didn't want a wasted journey I did an HPI check before I set off. Bong - Outstanding finance. Hmm.

Contacted the seller - yes it is on PCP but they were going to pay the finance company if I bought it and hand it back if I didn't - Nice of you to tell me your plans.

Issue is the finance company has closed all its phone lines due to COVID-19 and is only doing business through its web portal, so the option suggested above of speaking to them isn't there.

I suppose the above method (me paying the finance company) could be done with me paying the outstanding amount through the web portal and the seller the balance directly.

Any views?

[maz8062]

The only way I would do this is to agree a price with the seller, find out what the settlement figure is for the car and how long the figure is valid for. I would then pay the seller for the car less the finance amount and drive away. I’d later pay the finance company and get a receipt for the payment. Job done.

I think this is tricky and you have to make sure that you are comfortable with the seller, where they live, the documents for the car and receipt everything and both of you sign it.

This will probably never happen but what would stop a seller getting a buyer to pay the finance and then change their mind about selling the car?