Outstanding finance on new car
Discussion
I have agreed to purchase a car privately and the seller has confirmed it has outstanding finance. The issue is the amount outstanding to the finance company is about £5k more than I've agreed to buy the car for. The seller is happy for me to send my payment to the finance company but how can i guarantee they settle the remaining balance? What is the best approach in this scenario?
I've had this scenario before.
I agreed with the seller that they would pay the "additional settlement" first to the finance company and then I would pay the balance to them.
This was all done on a single phone call with both of us present.
Finance companies have seen all of this before and can confirm on the phone exactly what the settlement figure is whilst you are present and because they record the calls in worst case scenario you would have some evidence of having paid for the car.
Of course you can probably do it online now - so they log on and pay the £5k - it will show the new outstanding balance which you pay and drive away.
I agreed with the seller that they would pay the "additional settlement" first to the finance company and then I would pay the balance to them.
This was all done on a single phone call with both of us present.
Finance companies have seen all of this before and can confirm on the phone exactly what the settlement figure is whilst you are present and because they record the calls in worst case scenario you would have some evidence of having paid for the car.
Of course you can probably do it online now - so they log on and pay the £5k - it will show the new outstanding balance which you pay and drive away.
TryingHard said:
I've had this scenario before.
I agreed with the seller that they would pay the "additional settlement" first to the finance company and then I would pay the balance to them.
This was all done on a single phone call with both of us present.
Finance companies have seen all of this before and can confirm on the phone exactly what the settlement figure is whilst you are present and because they record the calls in worst case scenario you would have some evidence of having paid for the car.
Of course you can probably do it online now - so they log on and pay the £5k - it will show the new outstanding balance which you pay and drive away.
Thanks I think this will be the way forward, both on the phone at the same time credit cards in hand!I agreed with the seller that they would pay the "additional settlement" first to the finance company and then I would pay the balance to them.
This was all done on a single phone call with both of us present.
Finance companies have seen all of this before and can confirm on the phone exactly what the settlement figure is whilst you are present and because they record the calls in worst case scenario you would have some evidence of having paid for the car.
Of course you can probably do it online now - so they log on and pay the £5k - it will show the new outstanding balance which you pay and drive away.
paul_c123 said:
You can't pay off finance with a credit card.
I believe you can if its to settle the loan but they wouldn't accept it to pay off the monthly repayments ... will bring my debit card just to be sure.Side note here as not going to be the case, just got me thinking, but what were to happen if i wanted to finance the car myself?
Torque-2-Me said:
I'm very surprised at the "run a mile" responses, surely most cars are financed and therefore you would think buying privately, this scenario would be more common ... Maybe not with such a big difference in used purchase price to outstanding finance amount 
I think that buying a car with finance outstanding is common - my last purchase was that, although it was SOR.Buying a car with finance outstanding where the finance amount is more than the car is being sold for is much less common I'd think. And not something I'd want to buy - it's unlikely the car is so rare that you can't buy a less complicated example
If you need to speak to the finance company by phone, don't simply let the seller call them and then hand his phone over to you, you don't know who he might have actually called. Check out the finance company first, check their number is correct, and phone them yourself. Don't accept any screenshots from the seller proving the finance has been settled, they could be fake screenshots.
One of my first ever cars was one I bought with finance outstanding, but the seller arranged to settle it first, before I bought it. I then phoned the finance company and they confirmed the settlement, however I bet nowadays they would refuse to divulge this.
One of my first ever cars was one I bought with finance outstanding, but the seller arranged to settle it first, before I bought it. I then phoned the finance company and they confirmed the settlement, however I bet nowadays they would refuse to divulge this.
Torque-2-Me said:
I'm very surprised at the "run a mile" responses, surely most cars are financed and therefore you would think buying privately, this scenario would be more common ... Maybe not with such a big difference in used purchase price to outstanding finance amount
Yes finance is common, but it's rare to be so far underwater which makes it more complicated.Conventionally, say the agreed sale price is £5k more than the outstanding debt. In that case as a buyer I can agree to pay the seller £5k, and the finance company the rest, which is fairly simple and the buyer is in control of the situation, just as long as you know the figures.
In this case you need the seller to put money in to the transaction to make it work, i.e. the £5k. So it's more complicated, albeit not insuperable.
The Gauge said:
If you need to speak to the finance company by phone, don't simply let the seller call them and then hand his phone over to you, you don't know who he might have actually called. Check out the finance company first, check their number is correct, and phone them yourself. Don't accept any screenshots from the seller proving the finance has been settled, they could be fake screenshots.
One of my first ever cars was one I bought with finance outstanding, but the seller arranged to settle it first, before I bought it. I then phoned the finance company and they confirmed the settlement, however I bet nowadays they would refuse to divulge this.
Finance companies can and do regularly get enquiries along the lines of "do you have any financial interest in this car, registration AAnnAAA?" And they can give a yes/no answer including a confirmation email. However, data protection would prevent them from giving any other information, for example the settlement figure or their customer. So its of limited use to contact the finance firm in this instance. You'd need to have some kind of agreement with the owner, and for reassurance, see documentation of the settlement figure and it being part-settled. It makes sense to pay the finance company directly.One of my first ever cars was one I bought with finance outstanding, but the seller arranged to settle it first, before I bought it. I then phoned the finance company and they confirmed the settlement, however I bet nowadays they would refuse to divulge this.
Tread carefully, even a casual exploration of "what if" scenarios throws up many ways you could end up with no money and no car (or not being the true owner of the car). For example, what if he said he's settled, but didn't, then gave you the phone number of a random another finance firm? It is best to get a full vehicle check done, including finance info (they will give you the firm, an agreement number, contact number).
Pebbles167 said:
I'd be swerving that.
If it's deal of the century and a must have, you could potentially contact the finance company to see what's what. But ultimately until that finance is cleared the vehicle remains their property, not the sellers or by extension, yours.
Yeah no way. No guarantee that they will pay the difference unless you sit with them whilst they pay it on their phone or something similar.If it's deal of the century and a must have, you could potentially contact the finance company to see what's what. But ultimately until that finance is cleared the vehicle remains their property, not the sellers or by extension, yours.
TX.
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