Buying a car with outstanding finance

Bl4ckGryph0n

The only thing that would concern me is that the deal is to be done in the weekend. But even that concern is gone now

Look this is a normal procedure, I’ve been through that twice myself. And the finance company settlement team will talk to you. absolutely they will. Naturally the seller needs to provide permission and tell them what he is doing.

It is also perfectly ok to sell the vehicle. And the op is doing the right thing by paying the finance company direct. Again a totally normal procedure that happens so often. No different than what a dealer does when trading it in.

The most likely reason for the seller to sell it at that price is the mileage. That is my guess. I suspect the seller is taking a “loss” to avoid a higher penalty clause/bill if he were to just hand it back. Hence why this is so normal nowadays with more people taking out PCP deals on very low mileage. It is actually a good win win situation as the OP will likely also safe several thousand pounds compared to any other sale.

I’d not be concerned at all, but definitely complete during business hours

ChuckMountain

Except what he had already been offered by the dealer

Bl4ckGryph0n

Hey, he can get an extra £200 out of it. Although I suspect he is a little untruthful with the real dealer offer. I suspect the real dealer offer was a bit less.

pinnocchio

Interesting how many people in this thread seemed to take it personally when their advice appeared not to be listened to.

The OP asked for advice, if he chooses not to take it then that's his decision.  None of the rest of us should be emotionally invested in this.

None of us know how long the OP has spent looking for the specific car he's buying and for people here to think buying a car is not a decision that has a large emotional element would be surprising.

The advice has been offered, now the OP has to live with his decision.

ChuckMountain

Yes but my point was in respect to the taking over the finance from the seller suggested [email protected] In which the case the finance is currently 7,800 so if he did that and gave the seller 200 he would be out of pocket 8,000 instead of the 7,000 from his original offer.  The seller would be 1,000 better off then the supposed offer from the garage, which as you say could be actually more than the real dealer offer

fortyfive

I recommend you go to a local long term car dealer, ask him what they do in this case. This senario crops up every other car they buy.

ashenfie

The Car dealer will buy the car. You get the difference between outstanding credit and value of the car. The dealer will settle the credit, but not straight away.

Risk on the seller that the dealer does not pay credit company. This might happen if the a major is with the car, but unlike as they would not be able to sell the car.

The Op imho is take two risks.

1. Buy a car from someone who clearly can’t afford the car. Who know what else they could not afford to do on the car.

2. Buying a car with no legal title until the finance is settled. The finance company have the right to not sell the car. The OP has not as I see it the checked for a right to buy option exists within the contract.

Personally I always go the dealer route when purchasing as choosing a good dealer add to the cost but you have some comeback if things go wrong.

tich77

Not a lot really to add except:

The Op only has the seller's word that the garage offered £6,800. What is the guide price for the vehicle? A dealer will never offer the second-hand value of a vehicle, otherwise they have no margin to cover their overhead of keeping/maintaining the vehicle, any advertising costs, and making a profit when they sell it. Oddly enough, some people - from amateur radio enthusiasts to anglers - seem surprised that a dealer will not give them what their item is 'worth'.

Again, the guide price (Glass Guide) maybe be less than the outstanding finance; and guide prices do not take into account mileage, damage, servicing/lack of, etc. Be aware that when you inspect the car, despite it being "ideal", look for carpet damage, evidence of smoking/pets, dings and dents, paint damage, mileage, servicing, condition of brakes - and when you will need to replace them! Its a long drive to find that the seller over-sold the car, it really isn't worth the asking price, and he isn't willing to budge as he owes almost £8,000 on it.

So you decide to buy it. Be aware the the seller does not own the car, and does not have the legal right to sell it. You will not own the car even after you have paid for it, until the outstanding finance is settled

Just to make that clear, even after paying for the car, YOU DO NOT OWN IT.

Assuming the seller is genuine, this is where the potential for disaster lies: the finance company own the car, until the outstanding finance is paid. The seller has no legal right to sell as he does not own the car. The assumption is that he will pay the £7,000 to the finance company. Lets say he doesn't. The finance company trace the car to your address, and are perfectly within their rights to seize if from you. You are now out of pocket to the tune of £7,000, and have no car.

Worse, you have committed a criminal offence; buying stolen goods - you knowingly bought a car on finance. You can claim good faith, but if the seller had agreed to repay the finance company in your presence, didn't, and you still drove the car away, your "good faith" defence is not looking so good.

Why do you think HPI Check exists? So that buyers can avoid the situation of unknowingly buying a car that has outstanding finance, only to lose the car and their money when the vehicle is traced and reclaimed by the true owner, the finance company.

I'm wary of the seller anyway - why not take a firm offer of £6,800 from a dealer now rather than wait for someone who may or may not turn up a week or so later, may or may not pay the asking price, or might even walk away without buying, for the sake of £200. All the time knowing that if one goes back to the dealer, they know your circumstances and in all likelihood will now make a lower offer.

Bl4ckGryph0n

Got you, except you can’t just take over someone’s loan. And even if you can why would you want a loan when you have the cash anyway.

nheather

Not that I would do the deal, but what you describe is not what the buyer has said he will do.

There is £7800 outstanding.  So the buyer will make the seller pay £800 to the loan company.  The seller will then pay the remaining £7000 to the loan company.  The seller signs over registered keepr and the buyer takes the car away - no cash paid to the seller at all.

One concern (of a number) if I were the seller is that I would want written confirmation that the loan is cleared and that they do not continue to hold records that the seller is the registered keeper.

Also we don’t know that the seller can’t afford the car.  If we take what has been said, he has grown tired of it and is buying something else.

I suspect that it is all going to work out all right, not for me, I’m too ‘glass half empty’ but most times these sort of things are fine.

Cheers,

Nigel