Buying a car with outstanding finance?

[IC3]

I'm looking to purchase a car with 'cash' (bank transfer), as I'm not a fan of financing cars... However, the majority of cars seem to be on finance, hence why I've started taking this into consideration.

I've read a bit about it, however wanted to check if anyone knowingly has purchased a car with outstanding finance and wanted to ask how they went about it?

I was thinking of paying the debt off myself and transfer any leftover money to the seller. That way, I've proof of debt settlement and I'm 100% sure its paid off, or should I stay clear from cars with outstanding finance and just bend over for the dealer to go in dry?

 

[dlockers]

My friend did this routinely. It is not without risk and definitely prone to fraud, but it really depends on the attitude of the seller. My friend sold his mums Range Rover with finance outstanding and made clear that once the funds cleared, the buyer could watch him clear the finance.

I personally wouldn't do it. Only needs to go wrong once.

 

[Dominic-Toretto]

I haven't done this personally. But if you find a car you like from a trust worthy seller I would do the following after agreeing a price.

Have the seller call the finance company infront of you to obtain a settlement figure.

Pay directly to the finance company, pay the remainder to the seller.

 

[leoncuprar]

I've bought before and done it the way you are thinking of OP, that was nearly 20 years ago though. Would I do it again now... yes probably for the right car..

 

[johnny6]

Yeah done it before.

Got the seller to confirm the settlement figure and give me authority to speak with the finance company directly. Paid the finance off directly and gave the difference to the seller. Was a really simple process to be honest.

 

[Nasher]

I wouldn't risk it from a private seller. Too many scams around now with this stuff.

 

[deardevildude]

Have you done a HPI check on these? As if it is from a dealer they sometimes "finance" their cars as part of insurance just in case anything happens. But this should be noted on the HPI report.

If you're looking to buy privately stay clear away.

 

[Maccy]

Been a few threads on this so worth doing a search, but I’ve sold with outstanding finance. Very easy to do - seller gets a settlement figure and then the buyer pays the finance company the amount, plus any additional funds transferred to the seller direct.
Worth doing over the phone to the finance company direct though.

 

[IC3]

Funny situation...

So, I found a car and the seller told me the car has outstanding finance. I confirmed this with the finance company and he even sent me the documents (blurred sensitive info, rightly so...) However and this is the most worrying part, the HPI check comes back as clear! I'm seriously questioning the point of HPI checks now, as I just personally proved it's clearly not working...

 

[MissChief]

A strange one when I bought my Focus, the finance company wouldn’t take a payment from me at all, I had to transfer the money to him via my bank app, which I had to reset the password on as I’d always just used fingerprint recognition but given is was nearly £8k it wanted the password. The transfer took about twenty minutes too whereas most of the time it was instant, then he paid the remaining finance off.

 

[VTR]

Looked at selling my car a while back which had finance outstanding, the finance company confirmed they would only take payment from myself and not anyone else even with my authorisation. Can make it a bit tricky / open to fraud.

 

[IC3]

What's the F point of HPI checks, if they could be wrong... I'm aware of cars not being reported as write offs, even though they had claims against them - this thankfully is possible to verify during a viewing. But, how on earth can you check if there's finance against the car - call every company in the UK that offers car finance?

I sent them an email with a few questions, I wonder what the response will be...

 

[~Divine~Wind~]

Yeah done it before.

Got the seller to confirm the settlement figure and give me authority to speak with the finance company directly. Paid the finance off directly and gave the difference to the seller. Was a really simple process to be honest.

This

Do not under any circumstances pay the person the whole amount!

I had a guy drive a car to me expecting to be handed cash, did the HPI check while he was here, outstanding finance.
"Oh I forgot about that" had him phone the finance co, get settlement figure and I paid it off in full on my CC
Had him sign n date everything and he left the car and everything with me (leaving with no money)

Few days later finance company emailed me to say they no longer had any interest in the vehicle.
He then got the remaining money via bank xfer about a week later.

All safe

 

[Ahleckz]

What's the F point of HPI checks, if they could be wrong... I'm aware of cars not being reported as write offs, even though they had claims against them - this thankfully is possible to verify during a viewing. But, how on earth can you check if there's finance against the car - call every company in the UK that offers car finance?

I sent them an email with a few questions, I wonder what the response will be...

What’s the finance type? A personal loan often won’t show on the HPI as it’s not secured against the car. If that’s the case, you’re fine to buy without settling the finance.

A lot of buyers won’t know that it’s a personal loan, just thinking it’s ‘car finance’.

The finance company should be a give away but some providers offer both so not fool proof. Phone the finance company to find out.

 

[dlockers]

This

Do not under any circumstances pay the person the whole amount!

I had a guy drive a car to me expecting to be handed cash, did the HPI check while he was here, outstanding finance.
"Oh I forgot about that" had him phone the finance co, get settlement figure and I paid it off in full on my CC
Had him sign n date everything and he left the car and everything with me (leaving with no money)

Few days later finance company emailed me to say they no longer had any interest in the vehicle.
He then got the remaining money via bank xfer about a week later.

All safe

How did you settle a finance on credit card?

 

[gailjon]

How did you settle a finance on credit card?

You can pay by CC but they charge you as though it was a cash advance.

 

[Housey]

There is finance secured on the asset (the car) and/or finance owned by the person (the seller) as mentioned above.

The latter you don't need to worry about, the former you do and as has been said above some people don't know the difference. If they have an unsecured loan, have put it on their mortgage (against property equity) or even paid for it via a credit card it's is likely to be an unsecured (on the car) loan. So nothing to worry about. If it's a car loan (bank or finance house) it will be secured against the car and on that you need clarity as this will determine who has interest in getting paid.

I have sold and bought cars with finance before. You need to establish the money owed on any finance agreement secured on the car and then get the seller to evidence this. Do not under any circumstances pay the seller for this element of the cost, this needs to be paid to the financier and you need clarification that they no longer have interest in that car. You then pay the balance to the owner I would suggest on collection, via a bank transfer.

When I sold my GT3 I met the buyer at Fearnsport at Silverstone who he had paid to check the car out. When all was happy we both got onto Porsche finance and he paid them directly via bank transfer. They were able to see this arrive and were happy to release the car. He then paid the balance into my bank account via bank transfer and when it had hit I was happy to let the car go and he was happy all was settled.

Doesn't mean you still can't get shafted and if you are worried about that you can get escrow in place to protect you.

 

[~Divine~Wind~]

How did you settle a finance on credit card?

Called them and asked how much was outstanding, just paid it on CC

Didnt seem out of the ordinary to me at the time lol

 

[dlockers]

Called them and asked how much was outstanding, just paid it on CC

Didnt seem out of the ordinary to me at the time lol

Do you mean debit card? It would be very odd for a finance house to allow you to clear finance with another finance product is all.

 

[IC3]

Thanks all for the input! Really appreciate it, I believe the finance is on the car as the agent asked me about vehicle details and didn't really care about the owner/sellers full name.

I'm still waiting to get a response from the HPI company, whenever their £30k guarantee in case of misinformation covers this scenario. I was lucky enough to come across an honest seller, however as most of you on here mentioned this is a rarity compared to few years back... I gave up on that car after hearing what it needs, did a bit of math and its not worth the hassle.

I'm annoyed as missed on one car, even though I messaged the guy 20 min after he posted the advert. I now see the same car posted for nearly 4k more at an independent dealer, than the price he wanted for it...