Outstanding finance

Discussion in 'General Discussion' started by steve333, Jan 27, 2016.

  1. steve333

    steve333 Hardcore MB Enthusiast

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    Hi all,a dealer has a car my wife is interested in and after asking all the usual questions before arranging to view and test drive the dealer explained he is selling the car for a friends wife who's owned from new(63 plate) and she owes £6 k on finance to mb which will be cleared by the dealer when a sale/deposit is taken against the car.Question is,in the unlikely event this didn't happen,where do you stand legally if you bought a car from a dealer and it turned out finance was outstanding?
     
  2. JattAmg

    JattAmg Hardcore MB Enthusiast

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    Hi

    Ask to see proof of payment or wait approx six days after payment when the car should show as clear of finance upon doing a hpi check.
     
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  3. m2287

    m2287 Hardcore MB Enthusiast

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    Pay the finance company yourself and the balance goes to the dealer.
     
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  4. DrFeelgood

    DrFeelgood MB Club Veteran

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    My knowledge is 30 years old but I have no reason to believe that the law has changed.

    The lender would chase the dealer for the outstanding finance.

    If she bought from a private seller then it's less reassuring.
     
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  5. jotter22

    jotter22 Hardcore MB Enthusiast

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    Not sure you can sell a car with outstanding finance legally as technically it belongs to the financier i think? one of our more knowledgeable will be along shortly to remedy this.

    Tony.
     
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  6. OP
    OP
    steve333

    steve333 Hardcore MB Enthusiast

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    The dealer has said the finance will be settled on receipt of a deposit on the car and would be collecting it a week later so hpi should be clear and we will also ask for a confirmation letter from mb to be sure,thanks.
     
  7. OP
    OP
    steve333

    steve333 Hardcore MB Enthusiast

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    I suppose we could put that to the dealer,thanks for your help.
     
  8. grober

    grober MB Club Veteran

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    Technically they can't sell a car they don't own 100%

    appears i missed out a 't
     
    Last edited: Jan 27, 2016
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  9. OP
    OP
    steve333

    steve333 Hardcore MB Enthusiast

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    As far as I'm aware as the car is on the dealers website for sale the finance would be owed to mb by them but I stand corrected on that?
     
  10. m2287

    m2287 Hardcore MB Enthusiast

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    I sold a car which had some finance remaining before, the buyer bank transferd me the money, I rang the finance company and settled in full with the phone on loudspeaker, everyone walked away happy!
     
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  11. grober

    grober MB Club Veteran

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    Surely the dealer can settle the finance? If he's that strapped for cash what a happens if the car develops a major fault after selling it to you- how's he going to pay for the repair?
     
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  12. stevehg

    stevehg Hardcore MB Enthusiast

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    Just have it documented on purchase receipt that outstanding finance will be settled by seller within 7 days of purchase.

    If you are still overly concerned, pay your initial deposit by credit card. That way you will be covered for the full purchase price of the car by the credit card issuer.

    cheers, Steve
     
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  13. tangey

    tangey Hardcore MB Enthusiast

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    If you pay the full asking price to the dealer, and drive away the car, remember you don't own it if there is fianance on it. This is why every single dealer pays a few quid when they are buying a 2nd hand car, to ensure they know the finance position.

    A likely scenario is that as he is selling it "for a mate", he has decided to put it on the forecourt without having the mate pay off of the finance, possibly the mate is strapped for cash, so he's doing the mate a favour. But he doesn't want this favour to reflect in his cashflow, should the car not get offers for the right money, or sit on his forecourt for a while. Hence only paying off the fianace when there is a firm committment to purchase.

    I wouldn't get into paying off a 3rd party debt, I'd insist that any deposit is left on the basis that it's returnable unless the dealer shows evidence of the fianance being paid prior to the balance being handed over.
     
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  14. jotter22

    jotter22 Hardcore MB Enthusiast

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    Just walk away! Plenty more fish in the sea!

    Tony.
     
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  15. OP
    OP
    steve333

    steve333 Hardcore MB Enthusiast

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    Thank you all for your thoughts/advice,feel better understood for all your comments,will think it over a bit.
     
  16. SPX

    SPX MB Club Veteran

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    He's paying off his/her debts on the strength of your money.
     
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  17. Alf Barnet

    Alf Barnet Hardcore MB Enthusiast

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    Pick another car from another company.
     
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  18. moonloops

    moonloops MB Club Veteran

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    As above just walk away, outstanding finance = you will lose the car if it goes pear shaped.
     
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  19. OP
    OP
    steve333

    steve333 Hardcore MB Enthusiast

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    Some interesting and helpful comments,thanks to you all,have decided to swerve this one,not in a great hurry so better to make the right choice-what really got me thinking was the fact the dealer mentioned the owners husband is very wealthy with a collection of cars yet owes finance on one,maybe a good reason but didn't inspire confidence in making a purchase decision!
     
  20. E55BOF

    E55BOF MB Club Veteran

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    Is the dealer selling the car as part of the business's stock, or just acting as an agent for the owner? If the latter, you're effectively buying it in a private sale. Either way, if the dealer will accept payment by credit card, and can supply a letter from the finance company showing that the finance is paid off before the balance is paid, I'd go ahead if keen on the car. I wouldn't make a substantial deposit, though, just in case; a grand, say, should be enough to show a serious intention to buy. If a credit card sale is not acceptable, I'd be wary...
     

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