Buying a car with outstanding finance

Discussion in 'Motoring' started by Shooter1, Jul 26, 2018.

  1. Shooter1

    Shooter1
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    Hi all,

    Found a car that I like, but the private seller still has outstanding finance on the car. The seller can not afford to clear the balance before I pay for the car.

    What I was thinking of doing, from the sellers house:
    1. Seller to phone the finance company to confirm balance.
    2. I’ll phone the finance company and pay the agreed amount (via debit card)
    3. Seller will phone finance company and pay small remaining balance.
    4. Ask finance company to confirm nil balance.
    5. I’ll drive away with the car.

    This is further complicated by the fact that it’s a 4 hr drive and we want to do it on a Sunday.

    Does all of the above sound a reasonable solution?

    Thanks in advance.
     
  2. ChrisNic

    ChrisNic
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    Your plan sounds ok to me.

    Whether you can do it on a Sunday is another matter & expect for your bank to question the transaction which can take a bit of time to resolve, assuming you are using your debit card.

    Don’t trust the seller to clear the finance, you could end up with no cash & no car in a worst case scenario.
     
  3. nheather

    nheather
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    How about

    1. Seller to phone the finance company to confirm balance.
    2. I’ll phone the finance company and pay the agreed amount (via debit card)
    3. Seller says “Thanks, changed my mind, the car is no longer for sale”

    A bit tongue in cheek I guess, but I would want something formal in place before I paid off someone else’s loan.

    Cheers,

    Nigel
     
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  4. IronGiant

    IronGiant
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    If it's a Private Sale, how do you ever prove you bought it?
    Best you can do: Get a hand written receipt and proof you paid the seller.

    So I would suggest you get a receipt from the seller, bank transfer the money to them, and then sit down with them while they pay off the finance company. If anything looks fishy at any point, walk away.
     
  5. Greg Hook

    Greg Hook
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    Won't the finance company switch the balance to you? You can then take the car, the seller can pay you the small balance and you can pay off the finance company.
     
  6. pinnocchio

    pinnocchio
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    Sorry, can I ask the following:-

    Roughly how much is the finance outstanding on the car? (Make sure you get copies of the original finance agreement and check to see if there's a discount for early payment, but don't tell the seller).

    Roughly how much are you paying for it in total?

    Is the seller the original owner from new?

    Have you checked to make sure the Insurance, MOT and Tax are all up to date?
     
  7. Hixs

    Hixs
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    Other cars out there. Literally many many thousands of other cars. This one isn't special nor unique in any way.

    Move on.
     
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  8. John7

    John7
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    The car belongs to the finance company and the seller is therefore acting unlawfully by selling it.
     
  9. Smiffy 2

    Smiffy 2
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    Not if he has notified the finance company of his intentions and settles the outstanding finance.
     
  10. Smiffy 2

    Smiffy 2
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    Not going to happen for various reasons.
    Sorry.
     
  11. Shooter1

    Shooter1
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    Thanks for all replies, making me feel nervous!!

    The outstanding balance is £7800 and I’ve agreed to pay £7000.

    Whilst I agree there are lots of cars out there, however the price / model are a good fit.

    Will check to see if the loan can be transferred to my name.

    I’ll be printing off the AA used car receipt template.

    If the balance is paid off, are there any other issues?

    Thanks
     
  12. maxwell

    maxwell
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  13. pinnocchio

    pinnocchio
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    Good, being nervous means you'll be careful.

    So, just to be 100% clear......

    You believe at this stage that the finance outstanding is £7800.

    You're going to give him £7000 and he's going to add £800 to clear the finance?

    As it's a four hour drive ask him to photograph all the finance paperwork and send it to you for you to review before agreeing the deal.

    Once you have copies of that paperwork let's pick up again.

    I WOULD NOT try to do the deal this Sunday personally, there's still too many issues to be confirmed.
     
  14. Smiffy 2

    Smiffy 2
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    Cannot be done unfortunately.
     
  15. Shooter1

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    Thanks all, really good advice.
     
  16. John7

    John7
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    Personally, I wouldn't touch this with a barge pole. There are too many unscrupulous people out there and you risk being £7k down and no car.

    Is the seller the party that's forcing the deal to take place on a Sunday perchance? Urgent or rushed deals are usually a sign of a scam
     
    Last edited: Jul 27, 2018
  17. Shooter1

    Shooter1
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    No, he works away all week and only home on the weekend.

    I’m thinking of going up next Friday to do the deal.

    Is there any issue if I confirm with the finance company that it’s been paid off?
     
  18. delanoster

    delanoster
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    How about:
    1. The seller gets a private loan for £7000 and uses it to pay the car finance off.
    2. You buy the car after confirming that the finance is cleared.
    3. Seller uses the proceeds from the sale to payback the loan within 14 days thereby avoiding any interest.

    This way your only concerns are those normally associated with buying a second hand car in a private sale, rather than potentially being scammed.
     
  19. duncan159

    duncan159
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    A word of caution, when you speak to the Finance Co they will not discuss any aspect of the loan without authorization from the your seller (assuming the loan is in their name) due to DPA.
    So to be clear no acknowledgement that you are settling the loan or even if it relates to the car you are purchasing.
    Tread carefully!
     
  20. pinnocchio

    pinnocchio
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    I hate to be a bit anal about this, but honestly get all the paperwork BEFORE you start making commitments. I think you're getting ahead of yourself a little.
     
  21. Shooter1

    Shooter1
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    Thanks all, I’ll ask him to send me copies of all o& the paperwork.
     
  22. NinjaMonkeyUK

    NinjaMonkeyUK
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    This has scam written all over it. You're setting yourself up to lose £7,000. Don't do it.
     
  23. Shooter1

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    Not sure if I’m being dopey, but Where is the scam:

    If in my company on my phone I phone the finance company, then on speakerphone, the seller confirms his details, the settlement amount and I pay £7000 and the seller pays £800.

    I get a the seller to sign a receipt that states his name, address, car details and the amount I’ve paid.

    Thanks all.
     
  24. leamspaceman

    leamspaceman
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    Whenever anybody involved in a private purchase/sale says this... I'm immediately skeptical.

    If and when problems arise they'll always be saying "I can't do anything until the weekend as I work away all week." So that's five days of every week they can't sort potential issues out whether their working away all week is genuine or not.
     
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  25. Greg Hook

    Greg Hook
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    That is one of the typical scammer excuses, sorry I work away all week.

    Finance companies must have come across this sort of thing before, can't the seller phone them up and ask what needs to be done to be 100% correct?
     
  26. Sloppy Bob

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    When you're on the phone to the finance company on his phone and they're telling it's fine, it's all free and clear.

    How do you know who you're talking to?

    Is the car registered at the address you're going to meet the seller?
     
  27. safcalibur

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    You've got the very real potential of losing £7k here, I would walk away. As soon as you transfer the £7k into his account it's now his, if he decides not to pay the finance company off even in your presence what will you do? Also if you pay the finance company directly what's then to stop him selling the car?

    I know both scenarios may seem a bit out there but remember you are the one who will be in unfamiliar territory and 4hrs from home. You have no idea what you are potentially walking into. There are all sorts of nasty situations that could crop up I'd be wary mate.

    Just a little anecdote to share, something that happened to me and my dad a long while ago which sh*ts me up even today. We had a small newsagents and dad got an offer from someone to buy some cigarettes for cheap. We went along to a place we hadnt been before, as soon as we parked up two cars came and boxed our car in front and back. Immediately we knew something dodgy was up. Dad ended up paying can't remember how many thousands for the cigarettes but when we got home 95% of them were filled with foam. We were boxed in nowhere to go and I think at that point we realised something wasn't right, there were loads of these guys and they were big, very intimidating so my dad paid the money just to get of there alive.

    Please be careful mate.
     
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  28. ChuckMountain

    ChuckMountain
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    What finance company is it?

    The mainstream manufacturer ones are generally not open on a Sunday so not sure how you would ring them up and talk to them.
     
  29. TheAdmiralCS

    TheAdmiralCS
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    Just don't do it. Nothing else to say. Plenty more motors. Too many red flags here. Don't do it.

    Did I mention: DON'T DO IT
     
  30. xar

    xar
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    Mate of mine bought a BMW Z4 from a guy in a similar scenario. Great deal, last minute, at the weekend, paperwork always conveniently not ready. Had it 6 months and the real finance company appeared at the door to repossess the car. Turns out the 'finance company' he paid off at the time wasn't real. My mate also got cautioned by the police for buying stolen goods (as the seller effectively walked away from the real finance company).

    I would avoid like the plague.
     
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