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Hi everyone, I am located in Syd and I am about to buy a financed car from QLD

Just two questions for now:

1. Just wanted to know what are the usual or best procedure to purchase a financed car (which hopefully secure both seller/buyer from running away)

2. Whats the best way to deliver the car from QLD to Syd? and which company would you strongly recommend?

Thanks all in advance!

Things can get really messy if the car is encumbered to two institutions rather than one!

Assuming it's one, you need to gain permission from the seller to contact that institution through a contact person who will also be present on the date of payout and transfer and settlement.

Then you contact that person at that institution to get the final payout figure in writing > scan it > email it to you.

You make out two bank cheques - one equal to the payout figure in the name of the institution - the balance in the name of the seller.

But if you're not going to be present, two EFTs will have to be arranged which is more risky if you don't trust the seller.

Arrange to send the two cheques to the institution in readiness for the date of release/transfer/settlement > then picked up by the transport company of your choice.

Me? I'd fly up there > use two bank cheques > drive the car home!

  • Like 1

Do whatever you can to avoid buying an encumbered car at all.. As Terry says, it can get messy.

FYI if it's dealer used car, it is illegal for them to sell you an encumbered vehicle as it must have a clear title.

Plenty of encumbered cars are sold by legitimate owners either looking to upgrade or to get rid of the loan, so don't avoid a car just because it is encumbered. What you want to do is suss out the seller. A legitimate seller will organise for you to contact the finance company directly to find out how much is owed and how to pay it off. So ask the seller who the car is financed to, and then start chasing it up yourself. Once you agree on a price with the seller, you pay the finance company the amount owing to it and the balance to the seller, and you get to take home an unencumbered car.

The above is based on my experience. I had a car loan on an XR5 with BankMECU that I sold to a private buyer early last year. I called BankMECU and told them person X was looking to buy the car. I was able to see the balance owed to BankMECU the whole time so I was able to verify when the loan was paid off, and the buyer was talking directly with BankMECU and sent the payment to them, so the buyer was also able to verify when the loan was paid off and the encumbrance removed. He paid me the balance and took the XR5 home.

So in summary ask to speak with the finance company directly and sort it out with them. If the buyer isn't willing to do that then you are better off walking away.

Thanks for all of the suggestion guys!

I think I have my plan now:
I will fly up there with 2 bank cheques ready, sign the transfer of ownership agreement etc give him the cheque (that goes to him), then attend bank with
him together to deposit the other cheque (that goes to the finance company). After that I will take the car and wait for courier service to deliver it, so I watch the car get loaded onto the courier. Then I fly back to Syd.

That should be the best way?

Cheers guys

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