Buying a car - Seller needs payment to clear finance

stats007

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Is there a standard procedure for buying a privately owned car that is on finance? Would I pay the finance company directly?

It's putting me off what I think is quite a nice car.
 

nickg

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Definitely pay the finance co directly.
The seller should be completely relaxed about you communicating with the finance co directly.

No doubt they will be used to dealing with such transactions and may be able to suggest the best course of action
i.e. pay full amount to finance co and have them pay the balance to the seller ??
 

KLP 92

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I beleive you can pay the finance off directly to the finance company.

Whatever you do, don't buy the car without knowing the finance has been settled, otherwise they will take the vehicle from you until it is paid.
 

KLP 92

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I purchased a car on finance from a friend, paid the price of the car minus the finance owed and settled with the company direct.
 
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stats007

stats007

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I have no intention of paying the seller the full amount - so will either walk away or speak to the finance company. Not planning on following in the footsteps of the other Porsche buyer recently!
 

SG CL500

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Same experience as KLP - I have only bought 1 car from a private seller and that was financed. I called the finance co and asked for the o/s balance, paid them that and the seller the balance (both by bank draft, although you could probably clear the finance balance by credit/debit card which would be easier and probably give you some protection).

Finance co were very helpful.

Can't remember (we're probably talking 15 years ago now!) exactly how the transaction was undertaken but I think I just gave the seller both cheques and trusted him to send to the finance co. - not sure I would do that now.
 

saorbust

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I sold a car recently, which had finance. I decided up front to be completely open about it with the buyer - and asked them to pay the finance co. directly. I provided them with a dated letter from the finance co. with a settlement figure on it, instructions for payment and so forth.

I also informed them not to pay me the balance till they'd paid the finance company - and to advise me when the company had been paid. This of course was all written down in a contract.

The seller seemed perfectly happy to do this, and also requested that the finance company advise both parties by fax when the amount owed was settled.

All paid via Chaps (I covered the costs since it wasn't the sellers cost that I had finance on the car), all sorted reasonably quickly.

I also waited for the finance company to tell me that the funds had cleared - effectively I couldn't release the car to the buyer until the actual legal owner (the finance co.) told me I could. Essentially the finance house acted like an escrow account.

Easy to do - just make sure all parties are informed and all sign a contract.

J.
 

Dieselman

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Always pay the finance Company directly..
You will need the seller to contact the Co. and give permission to deal with you but then it all goes smoothly.
The seller will be issued a letter/fax to say you have paid. At this point they will still have the car but there has to be an element of trust in such a transaction.

If you pay the seller and they default even though they have given a reciept to say they will pay off the finance, the finance Co. will look to reposess the car, well that's what VAG told me..

I paid with maestro but they were not too happy to do it on the day..
 

mark.t

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but urmmmm when you pay a finance company surely there's interest from the original loan loaded on to it ......and a settlement figure would have a element of that interest in it ....are we happy to pay the other guys interest
 

KLP 92

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but urmmmm when you pay a finance company surely there's interest from the original loan loaded on to it ......and a settlement figure would have a element of that interest in it ....are we happy to pay the other guys interest
You aren't paying his interest, you are purchasing the car for its retail value minus whatever he owes to the finance company.
 

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