Buying A Car With A Loan On It

[Adz2332]

Hey guys and girls,

Im buying another car as ive sold my GTR.

Ive found one i like and ive put down a deposit.

He has said he had to take a car loan out to buy the car and is still paying it off.

As me the buyer what do i have to do differently ? if anything?

As ive never bought a car that is under finance.

[R34_Wong]

Wouldn't you need to find out how much he has left owing on the loan and then ensure that the money you are paying him for the car is going to that loan, rather than in his pocket?

So, payout the loan (thus car is fully owned by the seller), than whatever is left behind goes into he's pocket.

Think that would be the procedure

[scandyflick]

get your bank to write out a bank cheque to the finance company with the security.

[Krishy]

Wouldn't you need to find out how much he has left owing on the loan and then ensure that the money you are paying him for the car is going to that loan, rather than in his pocket?

So, payout the loan (thus car is fully owned by the seller), than whatever is left behind goes into he's pocket.

Think that would be the procedure

In this case lets just say the dude is selling his car to you for $15K....he has $10K owing to the bank....then what you would be doing is paying $10K to the finance company (in this case BANK) and giving the DUDE (the seller) his $5K.....i would be personally going to the bank and asking them for advice and they will be able to point you in the right direction and at the same time organise everything for you.....

if you paid the DUDE $15K and he does a runner.....guess what....your the owner of the new vehicle....and you most likely will be required to pay the payout amount.....

Same with insurance when your car is financed....the insurance company will payout (in case of a writeoff) the financial company what you owed them and then give you whatever is left

TREAD WITH CAUTION ON THIS ONE MY FRIEND

[Adz2332]

Thanks for the advice! ill contact my bank and see what they say and how i should go about ut.

Thanks

[Krishy]

please by all means let us know what your bank advices you for future reference mate

thanks

[HOSTILE]

Yep all the advice above is spot on...

Get payout figure on his loan, make out cheque to his finance company, then cash for any difference or seperate cheque. Do the signing of changeover forms at the bank when he deposits the cheque(s) and MAKE SURE YOU GET A PRINTOUT SHOWING ZERO BALANCE ON THE LOAN!!!

Good luck.

[Adz2332]

Yep thanks for the advice....

i will let you know how i go

[Giveitall]

http://www.transport.sa.gov.au/registratio...es_registar.asp

a good read for your situation.

[kb-r33]

Yeh the above comments are right! you woudnt wanna pay the guy the whole 15k and still be owing more money for the car.

[skylineguy19]

well i have a contradicting story. When i purchased my s14 the guy had finance on it. I paid him, he continued paying his loan. When i went to sell it a guy backed out cause he found out it still had a finance against it so i called the company the finance was with and questioned them. 2 different times i rang to be sure i was getting the right answer and they informed me that if he did a runner they would be chasing him for the money as the finance is in his name. They wouldnt be involving me at all, be it for the car or money. Havnt heard from them to this day and i see the car kicking around every now and then.

[JMW]

As Luke said, the only time they will come chasing you is if the loan was secured against the car. In which case the bank will order repossesion papers for the car if the person named on the finance defaults. But i could be wrong, had a similar situation a few years ago too.

[Krishy]

better be safe then sorry i guess

[SLED]

James is correct.

If the owner took out a personal loan to purchase the car but wasn't secured against the car then you'd be safe buying it cause if he did the runner the finance institution would chase him.

However, if the loan was secured against the car, either pay the finance company direct (and make sure you keep the receipt and have the rego papers) or avoid it with a 10ft pole.

[JMW]

Ha ha i surprise even myself sometimes Pete! The old melon is better for something other than dropping spanners on!

[Adz2332]

Hmmm so first step would be to find out who he has the loan through and give them a call?

[Damo_R34]

yep. Tell them you are buying the car, and need a payout statement. They will probably ask you what date you want the figure for, thats up to you.

[SLAPS]

I was in a similar situation some time ago.

I met the bloke down at his bank to pay out the loan. Saw with my own eyes, at the teller the loan was paid out in full.

[Adz2332]

Thanks for the advice. As it turns out its only a PERSONAL loan not a loan on the car so its fine. But as said above IF it was a car loan. Best way to do it (or as i was told by his bank) would be to go in with him to the bank with the cheque and pay it out there and then with him. theyll give you the loan payout statement there and then

[JMW]

Even if its a personal loan it can still be secured agasinst the vehicle. But yeah, do as you said and be there when its paid out and get a print out of the balance sheet for the loan. Probably wouldn't hurt to ask if it can be closed while your there too.