Buying a Car known to have outstanding Finance....

[NicoG]

Hello All,

I've bought a fair few cars in my time, but never one with finance owing.
I need to understand my options - I have no suspicions of the seller - seems to be a fine chap....

He has said so far there are two options:

1. He gets a loan and pays it off > I pay him > he pays off the loan...
2. I buy subject to the finance > I pay off finance.

Problem with 2 is that he needs every penny of his asking price to pay off the outstanding sum and I have already said I won't pay that much for the car.

I probably favour option 1 if I'm honest, but wondered how long the transaction would take to filter through to the point where the car has an unencumbered title and I buy free from 3rd party interests....
I'm tempted to tell him to take the loan out now and get ball rolling as he needs to do that in any event....

Thoughts please? - Are we missing any sensible options here.

Thanks in advance - Nick.

Edited by NicoG on Monday 6th January 14:51

[phil y]

If a car has finance outstanding, you need to be sure it gets cleared. The only way to do that is to pay directly to the finance company.

Not sure how the loan would work? What happens if he stops paying the loan?

[NicoG]

phil y said:

If a car has finance outstanding, you need to be sure it gets cleared. The only way to do that is to pay directly to the finance company.

Not sure how the loan would work? What happens if he stops paying the loan?

The idea was he got an unsecured loan from his bank and uses proceeds to pay off (Oracle) finance.
Whether he continues to pay that back is not my concern !!

[Hammy98]

Have you agreed a price with him?

If you agree a price (less than the outstanding finance), then have him pay you the difference beforehand then you clear the finance immediately after.

Much simpler than faffing about with loans.

[cuprabob]

Just ask them to get the settlement figure from the finance company and if you decide to buy the car you pay the finance company direct over the phone and get confirmation it's been cleared and then pay the seller the difference.

[Monkeylegend]

cuprabob said:

Just ask them to get the settlement figure from the finance company and if you decide to buy the car you pay the finance company direct over the phone and get confirmation it's been cleared and then pay the seller the difference.

This.

Whatever you do don't pay the seller the full amount on the promise that he will pay off the finance because if he fails to do so..................