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  • Purchasing private car with finance owing

    Hey guys, need your advice.

    Currently looking at a car that still has money owed on it.
    The payout owed is less then what the car is selling for.

    Would the process of buying it be simple as paying off the payout amount and the remaining sum to the seller?

    Anything else i should be wary of?

  • #2
    It's upto the seller to organise payout of the loan as it's all in their name etc. They would have to make agreement with financier for bill of sale to be removed on condition that all debts be paid out upon or before changeover over of vehicle to new owner blah blah.

    Essentially you shouldn't have to worry about it.


    • #3
      don't bother touching it until they have paid it out.

      If they never pay the loan, the car will get reposed from YOU if you bought it.

      Happened to a mate of mine, owner was a gambler


      • #4
        Are you going to have finance on it? If you are then your company will pay directly to the other finance company the pay out figure and then deposit, cheque etc teh remainder to the prev owner. If you are paying cash and hand it over to the owner and he doesnt pay it out eg pockets it. I can tell you you will loose the car when the finance company catches up with you.


        • #5
          when you buy the car, make one cheque out to the company that is owed the money, and the other cheque out to the seller for the difference... simple as that... then there is no headaches


          • #6
            Obviously the owner wouldn't have the money to pay out the loan until someone buys the car.

            So you would need to find out which finance company they have the loan with and you could contact
            them to see which way is suitable to them and if they would issue a letter stating they have no interest in the vehicle after you pay it out.
            Make sure you pay it out. Don't give them a cheque in the name of the finance company.
            You would need a payout figure and that is different each and every day.

            So you could attend an office of the loan company with the seller.
            You would need to pay out in cash (the only way it would work) to the finance company.
            Give the balance to the seller when he gives you a bill of sale and signs rego papers.
            Oh and you would want to see his drivers license for proof.

            You can check REVS on line to see who has any claim on the vehicle.
            You would get a certificate.

            Anyway whatever is practical. Make sure you have a witness
            with you and take photographs just in case.
            good Luck


            • #7
              Sorry Husky you posted while I was writing.

              It is as simple as that. True if everybody in the world were honest like us.

              But he would need to see or know what the payout figure is. NOT what the seller tells him.
              If the seller doesn't hand over the cheque in time then the loan will, if not paid on time
              be in default and without knowing what is in the contract regarding default of loan..hmmm.

              Just play it safe not sorry.


              • #8
                I buy and sell cars every 6 months and all my cars are financed and the cars i buy are mainly fiananced. OBVIOUSLY, you find out the payout figure the day you make the cheque out.. (common sense tells you that) and you give the cheque to the fianace company yourself (common sense tells you that too) you get a letter form the fianace company saying that that partibular VIN no. car is clear of debt annd then give the cheque to the seller for the difference... and if the payout figure is $50k (lets say), then you sure ain't going to be walking around with that sort of cash to hand over to the fianance company... thats why they invented bank cheque's... trust me.. you dont want to be handing over a large sum of cash to a fianance company agent.... thats just plain stupid


                • #9
                  Also go to the Rego office and pay the money to get the title checked to see who has a financial interest in the car.
                  That's what stamp duty etc is for when you transfer the rego, it goes onto the govt listing of whos owed what. You pay $10 (in SA anyway) to get a printout 2c if it's clear.
                  Otherwise, whoever is owed money for the vehicle is legally entitled to sell the car to get their money and the owner gets the rest.


                  • #10
                    Thanks for all the replies guys the car is for the gf

                    The person seems legitimate and honest. She says the loans with westpac.
                    If we do proceed, she said to go to the bank together and pay if off. Then sign off the transfer papers.

                    How does revs know or remove the encumbrance on the car? is it automatic or we have to inform them?


                    • #11
                      The bank will inform them, They are fair good at doing that

                      When I first got my car, I didnt have my custom plates, when I changed plates a week after getting the car, one week later my bank was calling asking why my number plates had changed haha. I needed to resend a copy of the rego papers for the new plates


                      • #12
                        Originally posted by husky510 View Post
                        when you buy the car, make one cheque out to the company that is owed the money, and the other cheque out to the seller for the difference... simple as that... then there is no headaches
                        Thats the way I have always done it on top of this I
                        Get the finance company on the phone with the buyer or seller present and obtain the PAYOUT figure not the amount owing as these two figures may differ by $1000s.
                        Ensure outstanding amount is transfered to the finance company by an EFT transaction & Do Not Hand over your car if you are the seller until the finance company states that they have received payment.
                        Don't trust any form of Cheque if you receive one contact issueing bank and get a clearance on it however the person handing you a cheque can cancel it leaving you up the creek.
                        Best is to have all transactions done by CASH or EFT.
                        Basically if the seller is not willing to have you sit with him whilst he on the phone to his finance company it rings alarm bells and makes me ask what else has he to hide.