Selling a car with outstanding finance?

[ehasler]

What's the score with selling a car that is still under finance?

When I sold my last car that was financed, I had to pay the final settlement figure myself before the buyer paid me, but is it possible for a private buyer to pay some of the purchase price direct to the finance company?

[Plotloss]

Yes in short.

You agree a price then get the settlement figure.

You give them the settlement figure and the details of where to send the cheque, ideally so you can both see it go in the postbox, and then any balance is paid straight to you.

[Wacky Racer]

Imo this option is fraught with difficulties

Legally, unless you bought your car with a personal loan, if on HP it is not your car to sell unless the finance company has been paid in FULL....

Imagine worst case senario, you go with buyer to the postbox, see him post his cheque to YOUR finance company for say for arguments sake £10,000 and the cheque bounced......even bankers drafts and building society cheques have been known to be stolen.....

99% of the time there would be no problems, just make sure you are not one of the unlucky 1%...

[TIME]

Make sure the cheque / cheques are bank or building society drafts, and send it registered post with both you and purchaser at the post office. Don't forget to put a copy of the agreement in with it and write your details on the back of the cheque.
Point taken about the drafts, if you get a settlement it will give you the date that is valid until, you can TT money to finance companies these days, phone them up and get their details, then the purchaser can settle the account this safe way. Better very safe than sorry.

>> Edited by TIME on Wednesday 7th April 10:32

[p7ulg]

Probably best to speak to your finance company and let them deal direct with your buyer.

[hobo]

Or you could just phone the hp company, get their bank details, and get the person buying the car to transfer the monies straight from their account to the hp company.

Or, don't hp companies accept switch/visa ? (albeit charge a small amount for doing so).

[lazyitus]

Agree price for car first.

Get the punter to give you two cheques, one for the finance company and the remainder for you. (Both totalling the agreed cost of the car)

Release the vehicle only when cleared funds are in your possession and the finance company confirm that the settlement is clear.

Simple.

[shpub]

ehasler said:

What's the score with selling a car that is still under finance? When I sold my last car that was financed, I had to pay the final settlement figure myself before the buyer paid me, but is it possible for a private buyer to pay some of the purchase price direct to the finance company?

Yes I have done that. It also prevents the seller taking the money from the buyer and not settling the finance. The Finance companies are usually pretty good on this and the paper trail is easier to follow.

[thegamekeeper]

Get the buyer to fax the draft to you before he comes to collect the car and check with the issuing bank that they have infact issued it, bank and building society drafts are VERY easy to forge and people do!!!!

[DustyC]

thegamekeeper said:

check with the issuing bank that they have infact issued it,

Not as easy to do as you would imagine as we found out on Saturday!

[thegamekeeper]

That it why you have it faxed across before collection so that you can verify it during banking hours.

[DustyC]

It made no difference even trying to verify it on the Friday!

[ehasler]

lazyitus said:

Agree price for car first. Get the punter to give you two cheques, one for the finance company and the remainder for you. (Both totalling the agreed cost of the car) Release the vehicle only when cleared funds are in your possession and the finance company confirm that the settlement is clear. Simple.

Thanks for the advice everyone - it looks pretty straightforward, and the above post seems like the best way of doing it.

My only concern is that a buyer may not be happy to wait a few days for cheques to clear and for the finance co to confirm that the settlement is clear. I guess most people should be OK with this though?

[j_s_g]

ehasler said:

Thanks for the advice everyone - it looks pretty straightforward, and the above post seems like the best way of doing it. My only concern is that a buyer may not be happy to wait a few days for cheques to clear and for the finance co to confirm that the settlement is clear. I guess most people should be OK with this though?

Depends on the buyer. Buyer of my Cerb had cleared funds put straight into my account a couple of hours before picking the car up. I put cleared funds straight into the account of the seller of the Tuscan, but this had to wait until a couple of days later because of a bank c*ck-up (Electronic Funds Transfer each time).

If it was me, and I'd not got a definite seller, I'd take out an unsecured personal loan with no early-repayment costs. I'd use this to settle the finance on the car. Then sell the car, and pay the loan off. Kind of a bridging loan. If I had got a definite seller, I'd probably try to get his deposit to be the cost of the finance (assuming it's not astronomical), have that go straight to the finance company, and give him all the paperwork excluding the V5 in return for the deposit - log book, service history, MOT, etc. You'd find it pretty difficult to "lose" a TVR in a hurry without all of that. I'd potentially even fill in the V5 ready to send, so he can see that you can't transfer it to someone else (without having ordered a replacement), but keep it yourself and not post it off. Finally, I'd write up a decent legal receipt for what's been done.

Can you tell I'm fussy?

[lazyitus]

ehasler said:

lazyitus said: Agree price for car first. Get the punter to give you two cheques, one for the finance company and the remainder for you. (Both totalling the agreed cost of the car) Release the vehicle only when cleared funds are in your possession and the finance company confirm that the settlement is clear. Simple. Thanks for the advice everyone - it looks pretty straightforward, and the above post seems like the best way of doing it. My only concern is that a buyer may not be happy to wait a few days for cheques to clear and for the finance co to confirm that the settlement is clear. I guess most people should be OK with this though?

If he really wants your car, he'll wait.

If not, there are quicker ways of transferring funds as mentioned.

[drum4it2]

lazyitus said:

Agree price for car first. Get the punter to give you two cheques, one for the finance company and the remainder for you. (Both totalling the agreed cost of the car) Release the vehicle only when cleared funds are in your possession and the finance company confirm that the settlement is clear. Simple.

Ed' I've done it this way with a few of my company cars - never a problem... if they won't wait - tell em to go have a Grolsch...

[jigs]

Better still keep the Tuscan S and enjoy it for another year or more - it's only coming up to it's first birthday isn't it?