Buying car from dealer with outstanding finance

[paqs]

Hi Folks,

I have HPI checked a car that I am in the process of buying from an independant dealer which shows as having outstanding BMW finance, the dealer says this will be paid off when the sale goes through and will take 10-15 days to have a clear finance record after the sale.

Is this normal practice when buying from a dealer, what happens if the dealer doesn't clear the finance after I've paid and they have my money and old car as p/x?

Thanks

[soad]

Let him pay it off, then buy it. No?

[paqs]

soad said:

Let him pay it off, then buy it. No?

I thought that but dealer said motor trade doesn't work that way, they said the finance isn't paid off until the sale is complete?

[kentmotorcompany]

Normally the money should be paid before you pick the car up.

Its very common if a car has only just been P/X'd with outstanding finance, to still show as owing finance on the HPI check, If this has only just been done the finance company often will not give clearance (a faxed or emailed letter stating they have no further interest in the vehicle) for about 10 days after they receive the cheque. Although some might confirm they are in receipt of a cheque.

You could ask to see proof (kind of) of payment, I.E a copy of the cheque that has been sent to finance house.

If the dealer is waiting for you to pay him before he settles the finance, be very wary. Most dealers will settle finance as soon as they get a car. Why has this dealer not done the same?

The last solution is, if the finance has not been paid yet, and the finance company involved accepts payments over the phone, you could pay the finance company over the phone and pay the dealer the difference, or get him to pay them over the phone while you are there, and you could verbally confirm the same over the phone. All a bit wishy washy really, if you not familiar with the process, and the dealer has not paid in advance.

HPI will not show it clear for some time after all of this, about two weeks, this maybe what the dealer is talking about. The clearance letter from the finance house is proof enough in the mean time.

Edited by kentmotorcompany on Sunday 5th September 17:33

[chard]

It could be the dealer has the car on sale or return so has not settled the finance.

Clarify exactly whats what and request proof of settlement.

[paqs]

The dealer said he is selling the car on behalf of a client, he's had it for about 5 weeks.

The dealer did not tell me the car had finance (although he didn't say it didn't either), I HPI checked it which flagged the outstanding finance.

When I asked about the outstanding finance he just confirmed that it did have outstanding finance that would be paid off.

He said a cheque would be sent off when the sale completed and this was 'normal practice'. I don't know if this is normal practice and whether I should not accept this?

I don't know whether the finance is in the name of the dealer or the registered keeper.

[kentmotorcompany]

Good point made above, Sale or Return cars are treated differently, in that they are still owned by the registered keeper and not the dealer. This may be a valid reason for it not being paid off in advance.

Trust your instincts. Or failing that use the Force.

[Zod]

It can be done very quickly. I sold a car to a PHer with BMW finance outstanding. he mad a transfer to BMW Finance and one to me. You have to trust the other party though.

[vxrandy]

paqs said:

The dealer said he is selling the car on behalf of a client,

That line alone would make me walk.

[paqs]

kentmotorcompany said:

Good point made above, Sale or Return cars are treated differently, in that they are still owned by the registered keeper and not the dealer. This may be a valid reason for it not being paid off in advance.

Trust your instincts. Or failing that use the Force.

My instinct is that all is well and I am being over cautious but I want to be sure, it would seem more digging should be done, do I try the finance company? Will they give me any info or will it all be data protected?

[steelej]

vxrandy said:

paqs said:

The dealer said he is selling the car on behalf of a client,

That line alone would make me walk.

Why, Sale or return is very common, I bought my 430 from main dealer, the car was sale or return with outstanding finance on it, when I bought the car the dealer cleared the finance and I didn't need to worry about anything.

John.

[BIST0]

vxrandy said:

paqs said:

The dealer said he is selling the car on behalf of a client,

That line alone would make me walk.

Really?! What other non issues do you walk away from? Your loss is someone else's gain i suppose. I've sold 2 cars on a sale or return basis with dealers. Worked very well and the new buyers have never had a problem with the dealer acting as broker.

[auditt]

vxrandy said:

paqs said:

The dealer said he is selling the car on behalf of a client,

That line alone would make me walk.

Same

He obviously has not got the cash flow to run the business properly and expects you the buyer to pay for the car so he can clear the finance and he reaps the rewards of a couple of grand....

[vxrandy]

steelej said:

vxrandy said:

paqs said:

The dealer said he is selling the car on behalf of a client,

That line alone would make me walk.

Why, Sale or return is very common, I bought my 430 from main dealer, the car was sale or return with outstanding finance on it, when I bought the car the dealer cleared the finance and I didn't need to worry about anything.

John.

Because that line is usually followed by no warranty "private sale".

[chard]

auditt said:

vxrandy said:

paqs said:

The dealer said he is selling the car on behalf of a client,

That line alone would make me walk.

Same

He obviously has not got the cash flow to run the business properly and expects you the buyer to pay for the car so he can clear the finance and he reaps the rewards of a couple of grand....

Plenty of dealers will have SOR cars. Benifits all parties, because the dealer does not have to own the car he can return a higher amount to the seller, just taking a handling fee rather than the usual margin. Also gives the dealer more stock. (I work for a dealer nothing underhand with keeping stocking charges down actually good business practice)

[paqs]

auditt said:

vxrandy said:

paqs said:

The dealer said he is selling the car on behalf of a client,

That line alone would make me walk.

Same

He obviously has not got the cash flow to run the business properly and expects you the buyer to pay for the car so he can clear the finance and he reaps the rewards of a couple of grand....

I just downloaded the companies last filed accounts and I think you are correct, they don't look too good although they are from over a year ago.

[chard]

vxrandy said:

steelej said:

vxrandy said:

paqs said:

The dealer said he is selling the car on behalf of a client,

That line alone would make me walk.

Why, Sale or return is very common, I bought my 430 from main dealer, the car was sale or return with outstanding finance on it, when I bought the car the dealer cleared the finance and I didn't need to worry about anything.

John.

Because that line is usually followed by no warranty "private sale".

If the dealer is selling (invoicing) the car to you then they will provide all the usual warranty, inspection etc. If they put you in touch with the owner for a private transaction (as in brokering) that is another matter.

[vxrandy]

chard said:

vxrandy said:

steelej said:

vxrandy said:

paqs said:

The dealer said he is selling the car on behalf of a client,

That line alone would make me walk.

Why, Sale or return is very common, I bought my 430 from main dealer, the car was sale or return with outstanding finance on it, when I bought the car the dealer cleared the finance and I didn't need to worry about anything.

John.

Because that line is usually followed by no warranty "private sale".

If the dealer is selling (invoicing) the car to you then they will provide all the usual warranty, inspection etc. If they put you in touch with the owner for a private transaction (as in brokering) that is another matter.

I always view it as a back door deal, why else would a dealer mention selling on behalf of someone.

[chard]

[/quote]

I always view it as a back door deal, why else would a dealer mention selling on behalf of someone.
[/quote]

Maybe he is an honest and open sort of bloke (they do exist)

If the dealer was to cease trading before the finance was settled OP would be in the poo. So why not offer to settle the outstanding finance on handover (telephone and debit card etc)

How about the one with the dealer refinancing cars on the day of handover so they don't show on HPI if you really want to get paranoide.

[BlueMR2]

I'd find out if you will get a warranty from them or if they are helping make a private sale as depending on the cost of the car it could make £0000's difference in price.

Then pay by card for the rest of the finance over the phone (for data protection you will probably need the owner there). Then repay what's left to the garage/cars owner.

If they had bad accounts last year do you really think they will have got better in the last year. Like someone said above, are you willing to risk £10k or whatever that they will happily pay it off and be blissfully unaware until someone comes and repossesses the car 6 months later and they have disapeared?

If you want something done properly do it yourself.

If you want to make sure the finance is paid off properly, do it yourself.

No owner should be against you paying of the rest of the finance whilst your stood there with them on the phone to the finance company. Someone who wants your money and to disappear might think differently though.