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Buying A Car That Has Money Owe-Ing On It

ztuned
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ztuned Mentor

ztuned

Posted
Posted (edited)

Hi,

I'm looking at buying a car at the moment but the owner has finance on it. I want to know what is process for payment to ensure the debt is cleared and I wont be in shti later.

This is what i am planning to do. Go with the owner to his finance company, get them to issues a statement on the loan account, showing fees and balance and the final figure to clear the account. Then i will go to the bank and get them to issues two bank cheques, one to the finance company with the exact oweing amount and reference to the owners account number, and a second of what ever amount is left to pay the owner. Give both cheques to the owner or should I go with him to the finance company so i can watch him hand over the cheque?

Is the approach I am taking correct? or does it make the owner feel like im not trusting him lol

cheers

Edited by ztuned
Yts Rising Star

Yts

Posted
Posted

its a hard one, but if it was me i would try to avoid buying a car that has finance on it full stop. that being said i think that getting two checks will insure that he has agreed to commit to paying off the loan. also if u feel like you are putting the owner in a postion that either makes him uncomfortable or you uncomfortable, just write a letter of intent stating that you have bought the car with the agreement that the owner is using part of the money to pay off the remainder of the loan and that you are not liable for any further payments later down the track. sign and date it with yours and his signatures and keep a copy for yourself.

good luck

ztuned Mentor

ztuned

Posted
  • Author
Posted

thanks,

i have called the fiance company and they said the loan is on the car, so the car is technical their property. Even if i have a letter, its just an agreement with the buyer and seller. If the loan is not paid off or repayments are not paid, then the fiance company with take the car.

So im just wondering if there is a standard procedure for these kind of senarios as i thought they were quite common

Yts Rising Star

Yts

Posted
Posted

thanks,

i have called the fiance company and they said the loan is on the car, so the car is technical their property. Even if i have a letter, its just an agreement with the buyer and seller. If the loan is not paid off or repayments are not paid, then the fiance company with take the car.

So im just wondering if there is a standard procedure for these kind of senarios as i thought they were quite common

maybe ask the company and see if they have a form for that or something then?

gtr fan Experienced

gtr fan

Posted
Posted

Usually they should provide you with a payout figure, which is good for a few days and then you can give them the funds by eft or cheque.

DO NOT let the seller handle this issue.

You could probably pay the whole amount to the finance company and they might refund the difference to their customer.

ztuned Mentor

ztuned

Posted
  • Author
Posted

true i could pay the full amount to the fiance company but im not sure if the seller will be happy about that lol.

yeh im not going to let the seller sort it out, dont want to be in shti later

i might give the finance company a call again

cheers

.:: GimpS-R34 ::. Grand Master

.:: GimpS-R34 ::.

Posted
Posted (edited)

you had it right the first time.. one chq for him.. one for the bank.. get the bank to issue remainer of payments..

who cares what the seller thinks.. i'm a trustful person but I'd still expect a buyer to critque me.. they dont know me.. you arent inviting this dude around for tea and scones..after the transaction you'll prob never see them again..

oh and as stated.. don't let the seller sort this.. you get the cheque to the bak.. or if he needs to be present.. get him to go with you.. i'm sure he'll do what's required to sell his car..

Edited by .:: GimpS-R34 ::.
ztuned Mentor

ztuned

Posted
  • Author
Posted (edited)

thanks guys,

situation changed a bit since i just spoke to the the owner. turns out he has more moeny oweing on the loan than how much he is asking for car, and he doesnt enough to cover the difference. fail.

so now he is going to apply for a personal loan and then use that loan to cover the car loan. once everything is cleared, ill give him the money he wanted for the car in cash.

sooo much hassle

Edited by ztuned
GTR-N1 Grand Master

GTR-N1

Posted
Posted

Q. If he's so short of moolah, did he service the car fully? Can you talk to the technician who serviced it and check if the owner took shortcuts?

Yes, once he has liquidity on his car, go to the finance co. together with one cheque to them and one to him as Craig 'n Bobby have said.

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