Buying car privately with outstanding finance
Discussion
Evening all, just wandered in for some advice if possible! I'm going to see a car (Lotus Exige) tomorrow that's possibly for sale privately (seller not quite yet decided if he wants to part with it). If the car is right and he is wanting to sell then all good.. except he's openly said that the car has finance on it.
Obviously i've not asked for any details/amounts at this stage but assuming it's on HP or PCP, is there an accepted safe way to purchase? Assuming he doesn't have the actual funds to pay off the finance in advance... my current understand and plan if it goes ahead would be:
- He asks for a settlement figure & process in writing from the finance company
- I can call the company directly to confirm this with them?
- We put something in writing to agree the price and process first.
- Myself and seller go to my bank in person, I transfer the settlement to finance company, and the remainder directly to him.
- He supplies a receipt confirming transfer of ownership
It leaves a gap for how we can get confirmation that the finance payment has been accepted and settled?
Obviously i'm aware that with finance secured on the car, its the finance company that technically owns it so he needs to gain their advice on how to sell. What else do we need to consider?
Obviously i've not asked for any details/amounts at this stage but assuming it's on HP or PCP, is there an accepted safe way to purchase? Assuming he doesn't have the actual funds to pay off the finance in advance... my current understand and plan if it goes ahead would be:
- He asks for a settlement figure & process in writing from the finance company
- I can call the company directly to confirm this with them?
- We put something in writing to agree the price and process first.
- Myself and seller go to my bank in person, I transfer the settlement to finance company, and the remainder directly to him.
- He supplies a receipt confirming transfer of ownership
It leaves a gap for how we can get confirmation that the finance payment has been accepted and settled?
Obviously i'm aware that with finance secured on the car, its the finance company that technically owns it so he needs to gain their advice on how to sell. What else do we need to consider?
Done this as a seller a few times ( there is a thread on here somewhere about this same subject).
Basically the seller needs to get a letter from the finance company confirming the settlement amount. Let’s say it’s £10k and you are buying the car for £15k. Meet the seller at the address the vehicle is registered to and decide if you want to go ahead. If you do then you will need to transfer the full cost to the sellers account so that he can then immediately settle the £10k finance on the phone with a debit card. Dial the number of the finance company yourself and sit with the seller as he goes through the procedure. That way you will be certain he really is dealing with the finance company and it’s not a scam. You won’t be able to have any direct dealings with them due to data protection so he he will need to settle the outstanding amount with a debit card. He should be happy to do this with the phone speaker on so it’s all completely transparent.
NB: don’t do this later than about 2.00pm as it can take a few hours to get a confirmation email. Once the email comes through, get the seller to share it with you, sort out the logbook transfer of ownership and you can drive the car away ( make sure you insure it).
Basically the seller needs to get a letter from the finance company confirming the settlement amount. Let’s say it’s £10k and you are buying the car for £15k. Meet the seller at the address the vehicle is registered to and decide if you want to go ahead. If you do then you will need to transfer the full cost to the sellers account so that he can then immediately settle the £10k finance on the phone with a debit card. Dial the number of the finance company yourself and sit with the seller as he goes through the procedure. That way you will be certain he really is dealing with the finance company and it’s not a scam. You won’t be able to have any direct dealings with them due to data protection so he he will need to settle the outstanding amount with a debit card. He should be happy to do this with the phone speaker on so it’s all completely transparent.
NB: don’t do this later than about 2.00pm as it can take a few hours to get a confirmation email. Once the email comes through, get the seller to share it with you, sort out the logbook transfer of ownership and you can drive the car away ( make sure you insure it).
Mark V GTD said:
Done this as a seller a few times ( there is a thread on here somewhere about this same subject).
Basically the seller needs to get a letter from the finance company confirming the settlement amount. Let’s say it’s £10k and you are buying the car for £15k. Meet the seller at the address the vehicle is registered to and decide if you want to go ahead. If you do then you will need to transfer the full cost to the sellers account so that he can then immediately settle the £10k finance on the phone with a debit card. Dial the number of the finance company yourself and sit with the seller as he goes through the procedure. That way you will be certain he really is dealing with the finance company and it’s not a scam. You won’t be able to have any direct dealings with them due to data protection so he he will need to settle the outstanding amount with a debit card. He should be happy to do this with the phone speaker on so it’s all completely transparent.
NB: don’t do this later than about 2.00pm as it can take a few hours to get a confirmation email. Once the email comes through, get the seller to share it with you, sort out the logbook transfer of ownership and you can drive the car away ( make sure you insure it).
Not true, I paid the finance company direct with no problems at all as a buyer.Basically the seller needs to get a letter from the finance company confirming the settlement amount. Let’s say it’s £10k and you are buying the car for £15k. Meet the seller at the address the vehicle is registered to and decide if you want to go ahead. If you do then you will need to transfer the full cost to the sellers account so that he can then immediately settle the £10k finance on the phone with a debit card. Dial the number of the finance company yourself and sit with the seller as he goes through the procedure. That way you will be certain he really is dealing with the finance company and it’s not a scam. You won’t be able to have any direct dealings with them due to data protection so he he will need to settle the outstanding amount with a debit card. He should be happy to do this with the phone speaker on so it’s all completely transparent.
NB: don’t do this later than about 2.00pm as it can take a few hours to get a confirmation email. Once the email comes through, get the seller to share it with you, sort out the logbook transfer of ownership and you can drive the car away ( make sure you insure it).
BertBert said:
Not true, I paid the finance company direct with no problems at all as a buyer.
That's my current understanding too. One thing to also mention is that the car is actually located close to me (currently in a bodyshop) but the seller lives an hour or two away. I'm thinking best practice would still be for me to go to the sellers house to complete the purchase in order to check he lives there etc, but a quick check of his driving licence should also do the same. Ideally he'd just collect from the bodyshop and bring the car here and I take us to the bank to complete the transaction (car is £65k so i don't wanna do online transfer etc, plus he's a bit nervous as a seller, so in a bank in person feels safer for us both).Interesting feedback comments - when I dealt with VWFS the first thing they asked was if you are the customer as they would only deal with that person.
Apologies if my info is out of date and now its possible for a third party person to pay the settlement balance. I will be dealing with them again shortly and will ask about this.
My comments only apply to VWFS - other lenders may take a more relaxed approach.
Apologies if my info is out of date and now its possible for a third party person to pay the settlement balance. I will be dealing with them again shortly and will ask about this.
My comments only apply to VWFS - other lenders may take a more relaxed approach.
BertBert said:
Mark V GTD said:
Done this as a seller a few times ( there is a thread on here somewhere about this same subject).
Basically the seller needs to get a letter from the finance company confirming the settlement amount. Let’s say it’s £10k and you are buying the car for £15k. Meet the seller at the address the vehicle is registered to and decide if you want to go ahead. If you do then you will need to transfer the full cost to the sellers account so that he can then immediately settle the £10k finance on the phone with a debit card. Dial the number of the finance company yourself and sit with the seller as he goes through the procedure. That way you will be certain he really is dealing with the finance company and it’s not a scam. You won’t be able to have any direct dealings with them due to data protection so he he will need to settle the outstanding amount with a debit card. He should be happy to do this with the phone speaker on so it’s all completely transparent.
NB: don’t do this later than about 2.00pm as it can take a few hours to get a confirmation email. Once the email comes through, get the seller to share it with you, sort out the logbook transfer of ownership and you can drive the car away ( make sure you insure it).
Not true, I paid the finance company direct with no problems at all as a buyer.Basically the seller needs to get a letter from the finance company confirming the settlement amount. Let’s say it’s £10k and you are buying the car for £15k. Meet the seller at the address the vehicle is registered to and decide if you want to go ahead. If you do then you will need to transfer the full cost to the sellers account so that he can then immediately settle the £10k finance on the phone with a debit card. Dial the number of the finance company yourself and sit with the seller as he goes through the procedure. That way you will be certain he really is dealing with the finance company and it’s not a scam. You won’t be able to have any direct dealings with them due to data protection so he he will need to settle the outstanding amount with a debit card. He should be happy to do this with the phone speaker on so it’s all completely transparent.
NB: don’t do this later than about 2.00pm as it can take a few hours to get a confirmation email. Once the email comes through, get the seller to share it with you, sort out the logbook transfer of ownership and you can drive the car away ( make sure you insure it).
They issue a letter or email saying it is clear which I just forwarded onto the new buyer.
Good to know this is acceptable these days. Last time I did it (8 years ago) I had to have the buyer transfer the money to me and then I pay the finance company over the phone with my debit card. The buyer being able to pay them directly is so much easier - good that something has actually got better /easier! :-)
Rather than start a new thread can I just get a sense check/confirmation the process for this remains the same.
I've lined up a potential private purchase. Got a picture of the V5 in the sellers name at their address. They've confirmed it's got outstanding finance.
I want him to hold the car for me as I'm on hols and it's both keenly price and the perfect spec I'm after.
I was going to suggest a £250 holding deposit using PayPal goods and services (so there's the potential to get that back in the event of any issues).
I have suggested he first get a settlement figure emailed to him and then fwd to me.
I see the car next week, swoon over it and agree to buy. I ring the finance company and he does the security checks etc and I then pay using my debit card. Then check the amount has left my bank. Then ask for an email to confirm no interest in car.
And take it from there.
It alla feels a bit sketchy given there's likely to be over 25k to settle and I'd I get scammed in some way my Mrs will literally kill me.
I've just had a thought. What if the outstanding balance is more than the asking price. I assume we'd have to agree he pays off that portion first, then I clear it to zero. And if any excuses are made as to why this isn't possible or not a problem is a huge red flag.
I've lined up a potential private purchase. Got a picture of the V5 in the sellers name at their address. They've confirmed it's got outstanding finance.
I want him to hold the car for me as I'm on hols and it's both keenly price and the perfect spec I'm after.
I was going to suggest a £250 holding deposit using PayPal goods and services (so there's the potential to get that back in the event of any issues).
I have suggested he first get a settlement figure emailed to him and then fwd to me.
I see the car next week, swoon over it and agree to buy. I ring the finance company and he does the security checks etc and I then pay using my debit card. Then check the amount has left my bank. Then ask for an email to confirm no interest in car.
And take it from there.
It alla feels a bit sketchy given there's likely to be over 25k to settle and I'd I get scammed in some way my Mrs will literally kill me.
I've just had a thought. What if the outstanding balance is more than the asking price. I assume we'd have to agree he pays off that portion first, then I clear it to zero. And if any excuses are made as to why this isn't possible or not a problem is a huge red flag.
Edited by dave_s13 on Thursday 31st July 13:04
ZX10R NIN said:
You've got it exactly right pay the finance company get the confirmation by email & then pay the balance to the seller.
Cheers mate.I've confirmed he does in fact owe more than the sale price so agreed he's gonna pay the difference first, then I zero the balance. It still feels a bit of a risk/hassle but it's at least 2 grand less than buying from a dealer.
Edited by dave_s13 on Thursday 31st July 17:49
dave_s13 said:
Cheers mate.
I've confirmed he does in fact owe more than the sale price so agreed he's gonna pay the difference first, then I zero the balance. It still feels a bit of a risk/hassle but it's at least a grand less than buying from a dealer.
Get him to make you a coffee/tea (maybe a couple of chocolate hob nobs) be relaxed & expect it to take upto an hour, my worst is an hour & a half & best 20 minutes.I've confirmed he does in fact owe more than the sale price so agreed he's gonna pay the difference first, then I zero the balance. It still feels a bit of a risk/hassle but it's at least a grand less than buying from a dealer.
Make sure he pays the balance at least 24 hours before you go to buy the car because multiple payments on the same day can sometimes foul up the system.
Also use it as an opportunity to have a good look around the car.
ZX10R NIN said:
dave_s13 said:
Cheers mate.
I've confirmed he does in fact owe more than the sale price so agreed he's gonna pay the difference first, then I zero the balance. It still feels a bit of a risk/hassle but it's at least a grand less than buying from a dealer.
Get him to make you a coffee/tea (maybe a couple of chocolate hob nobs) be relaxed & expect it to take upto an hour, my worst is an hour & a half & best 20 minutes.I've confirmed he does in fact owe more than the sale price so agreed he's gonna pay the difference first, then I zero the balance. It still feels a bit of a risk/hassle but it's at least a grand less than buying from a dealer.
Make sure he pays the balance at least 24 hours before you go to buy the car because multiple payments on the same day can sometimes foul up the system.
Also use it as an opportunity to have a good look around the car.
1. Go see car
2. Want car
3. Ring finance co.
4. Seller pays an amount (balance minus agreed sale price)
5. I pay an amount (bring balance to zero I.e. the agreed sale price)
6. Finance co confirm all is well, not their interest anymore.
7. Complete V5
8. Sort insurance
9. Drove home
Does it not work quite like that in reality?
Cheers.
Mark V GTD said:
It can. I would have expected the seller to have provided me with a communication or print off from the finance company showing the settlement figure already.
Not viewing til next week (I'm on holiday). I've asked him to get that sorted. Which he appears to be onboard with.I would hpi it too, make sure the finance company details and agreement details match.
Don't use the telephone numbers on his paperwork, find them out for yourself
If he is picking you up from the station have a look around the car before you leave, you will know in 30 seconds if its a decent one. If its not then your at a station and its easy to get back, nothing worse than having to find a bus - my walk of shame was birmingham. Get him to drive, you will get a feeling how its been driven. Turn the radio off, listen for noises and knocks.
Have a good look around the house, see if his picture is on the wall
Oh and don't buy a car from a pub in Coventry .... I spent 3 years doing it, trust your inner feelings.
If its a rare spec then go for it, if your buying it because its 2k cheaper than a dealer but common then just buy one from a dealer
Don't use the telephone numbers on his paperwork, find them out for yourself
If he is picking you up from the station have a look around the car before you leave, you will know in 30 seconds if its a decent one. If its not then your at a station and its easy to get back, nothing worse than having to find a bus - my walk of shame was birmingham. Get him to drive, you will get a feeling how its been driven. Turn the radio off, listen for noises and knocks.
Have a good look around the house, see if his picture is on the wall
Oh and don't buy a car from a pub in Coventry .... I spent 3 years doing it, trust your inner feelings.
If its a rare spec then go for it, if your buying it because its 2k cheaper than a dealer but common then just buy one from a dealer
dave_s13 said:
Hi mate... Not sure I understand, as I'm under the impression he needs my cash to pay the balance. I'm predicting it'll be.
1. Go see car
2. Want car
3. Ring finance co.
4. Seller pays an amount (balance minus agreed sale price)
5. I pay an amount (bring balance to zero I.e. the agreed sale price)
6. Finance co confirm all is well, not their interest anymore.
7. Complete V5
8. Sort insurance
9. Drove home
Does it not work quite like that in reality?
Cheers.
Seller pays the balance minus the agreed sale price the day before, you then come the next day pay the finance company & get the balance to zero once you've paid the agreed sale price.1. Go see car
2. Want car
3. Ring finance co.
4. Seller pays an amount (balance minus agreed sale price)
5. I pay an amount (bring balance to zero I.e. the agreed sale price)
6. Finance co confirm all is well, not their interest anymore.
7. Complete V5
8. Sort insurance
9. Drove home
Does it not work quite like that in reality?
Cheers.
Then wait for the confirmation.
ZX10R NIN said:
Seller pays the balance minus the agreed sale price the day before, you then come the next day pay the finance company & get the balance to zero once you've paid the agreed sale price.
Then wait for the confirmation.
Thanks for this. Then wait for the confirmation.
Seller is contacting finance company now to sort getting the balance down to agreed sale price. I assume you can do this with car finance? I know you can't with a personal loan. I'm then set to pick it up next week and pay the balance to zero.
The current situation is.
Settlement figure is about 2k more than asking.
Seller is going to transfer me that additional 2k.
I'll then pay off the balance in one transaction.
What's not entirely clear is it motonovo finance will accept payment from a 3rd party. I've emailed them to ask. I cant really call as I'm outside the EU on me holds and the cost to phone someone is eye watering!!
Settlement figure is about 2k more than asking.
Seller is going to transfer me that additional 2k.
I'll then pay off the balance in one transaction.
What's not entirely clear is it motonovo finance will accept payment from a 3rd party. I've emailed them to ask. I cant really call as I'm outside the EU on me holds and the cost to phone someone is eye watering!!
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