Selling Private With Outstanding Finance on the Car

kinger8938

kinger8938

kinger8938

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Hey guys, Just after a bit of advise really.

I've been debating moving my car on and getting out of the PCP loop. I was tempted by the car buying sites as it's all made easy, they pay off outstanding finance as part of the deal etc however over the last few months their valuations (for me) have dropped by a fair chunk Vs private selling whereas before it wasn't far off.

So if I was to sell private, obviously I would make this all clear in the advertisement but what's the general consensus?

Any tips, seems like there's a bit of risk involved with going this route. I imagine I give them the settlement, they clear that and pay me the difference in cash prior to taking the car. But any advice on this would be appreciated

Thanks!

Matt
 
i sought advice on buying a car with money owed on it a while ago, afaik on the day of sale :

-you get a settlement figure over the phone from your lender in front of the buyer
-the buyer then pays you the agreed price (it must be equal or greater than the settlement figure)
-you then in front of the buyer ring the lender and pay the settlement figure to the lender
-you obviously pocket the difference, do the docs formalities and the buyer drives off in your old car
 
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Each to their own I guess, but if it's a car on PCP then it's likely to be of a fairly reasonable sum. I'm not sure I'd want to BT over that sizeable sum of money for someone to then use to pay off their finance.

I'm sure there are people out there that would do that, I just think you'll be shortening the pool of potential buyers by having to go this route.
 
I did this with my S5 earlier this year.

Step 1: Obtain a quote from the PCP provider for settlement figure.
Step 2: Make it clear in the advert that it is still under finance, but you have a settlement figure. Point out that you would pay the settlement figure with them in person, once they transfer the funds to you. You'll need to be VERY clear on how/when you can make payment to the PCP provider - you might not be able to pay them at weekends if it's a large sum, for example.
Step 3: Be prepared for some to drop out because of the finance.
Step 4: Once you receive confirmation from the PCP company that the finance is settled, you can show this to the buyer.
 
It's put me off selling a few times, if the prices were a bit more comparable I would just sell to webuy or something as they sort all that.

I know that I personally would be sceptical about buying a vehicle with it outstanding in this way
 
Can you take out a bank loan for suitable amount?
You could then wait until a sale is agreed, take out loan, pay off finance and sell the car finance free.

Also where are you sourcing a new car from? If its a dealer you can get them to sort outstanding on yours even if its more than the car your buying.
All depends on price they will give of course.

If trade prices have fallen however its possible private will as well. Trade are based on demand to some extent (heavily biased by auction sales prices)
 
tyke_ said:
i sought advice on buying a car with money owed on it a while ago, afaik on the day of sale :

-you get a settlement figure over the phone from your lender in front of the buyer
-the buyer then pays you the agreed price (it must be equal or greater than the settlement figure)
-you then in front of the buyer ring the lender and pay the settlement figure to the lender
-you obviously pocket the difference, do the docs formalities and the buyer drives off in your old car
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When I bought my Focus, a good 7-8 years ago, the finance company refused to take payment from me, it had to be the seller. This then meant transferring him the money and waiting for £7,800 clearing I to his bank which at the time took nearly an hour. He then went on the phone, paid off the settlement figure and I got conformation from the finance company they had no further interest in the car.
 
Seems pointless taking out a loan for such a short time, and that's providing you can even get a loan for the full amount.

When I sold my M140i in 2018, the buyer was happy to pay the balance of the finance over the phone and transfer me the rest. Just give the finance company a heads up and it'll be fine.
 
Taking out a loan will probably just complicate things more - it'll take a while for car vertical checks etc. to recognise it has been paid off.
 
When I purchased my GT3 the owner had outstanding finance, as we knew each other, I just sent him the cash required to pay of his finance and then transferred the rest a couple of days before I was due to pickup the car from him, life was made easier as we knew each other so I had no issues just sending him large sums of money so he could clear the finance.

As your selling as others have said, ring your finance company, tell them your plans and they will let you know best way to proceed no doubt along with that it should be a working day and ideally before midday, I'd also always recommend the buyer transfers to a finance company using a CHAPs payment method to ensure they get the payment same day using the reference they give you. Then for the additional amount owing to yourself again if you want to 100% have it that day request CHAPs but the new faster payment system tends to be instant now depending on the bank and amount, but some banks are still a bit slow and hence CHAPs and working days within working hours can be best.

I made the mistake many many years ago of doing a bank transfer which never arrived with the recipient that day, of course the seller refused to release the car so I had to return home, out of pocket and no car, sleepless night and then get the car the following day after seller confirmed funds in account, totally understandable from a sellers point of view as likewise I'd never release a car until the funds were in my account.
 
Might be worth checking back with where you got the car from on finance initially - though prices have as you mentioned dropped off a bit lately - they are often still offering good settlements and/or buy backs on vehicles they have a full service history, etc. on.
 
Right now values are not that great on the RS due to the Ultime just hitting the market (even though not in UK!). Give it some time the values will rise sharply ;)
 
Rroff said:
Might be worth checking back with where you got the car from on finance initially - though prices have as you mentioned dropped off a bit lately - they are often still offering good settlements and/or buy backs on vehicles they have a full service history, etc. on.
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Hey thanks. Funnily enough I actually contacted the dealer that I originally got the car from today (it was their demo vehicle at the time) and they did offer me £2.5k more than WBAC at present based on what they know if the vehicle and the details I gave.

There is that allure that I could get more privately but it seems like a big hassle/worry with the finance situation.

My PCP is with my bank, so I just have to provide the dealer with that info if I did wish to pursue their offer.

I may give Motorway a try, just not so sure on that one.
 
I would say that if i was a buyer i wouldn't want to go through all the hassle of this unless the car was very special or very cheap.

There's just too many ways it can seem like a scam, phoning up random companies i've never dealt with to pay off large sums of money etc could so so easily be a setup.

I know it is an above board thing to do BUT you will limit your market a lot to people who are willing to take quite a big risk for what is normally a fairly small saving over buying a similar car from either a dealer with some comeback or just another seller who owns the car outright.
 
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Yeah I'm looking at other options as I think it's risky as a seller too in similar ways.

A friend of mine stupidly sold his with outstanding PCP and let the buyers take the car away before the lump sum had cleared with his finance company!

Stuff that. He said it was a sleepless night but luckily by morning all was fine. But silly error on his part imo but then the buyer may not feel comfortable parting with the money and having to go away until it had been cleared so similar issues either way I guess
 
Ok so I think I've found a Mustang that I want to buy. The guy advertised it on a Mustang FB group and was up front in the ad that there is finance on it. What is the best way to do it? Obviously I'm going to want to see written proof of how much he needs to pay to get out of the finance and speak to them myself. Do I pay them or do I pay him and he pays them? Its miles away in North Wales so I will get an AA inspection before I fully commit and head up there to pay and collect it if that checks out ok. He seems like a legit guy, sent me copies of the V5, service history. Car had 1 owner before him and he's owned it since August 2022 according to the V5.
 
Colonel_Klinck said:
Ok so I think I've found a Mustang that I want to buy. The guy advertised it on a Mustang FB group and was up front in the ad that there is finance on it. What is the best way to do it? Obviously I'm going to want to see written proof of how much he needs to pay to get out of the finance and speak to them myself. Do I pay them or do I pay him and he pays them? Its miles away in North Wales so I will get an AA inspection before I fully commit and head up there to pay and collect it if that checks out ok. He seems like a legit guy, sent me copies of the V5, service history. Car had 1 owner before him and he's owned it since August 2022 according to the V5.
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The owner needs to get a settlement figure from his finance company. I've had trouble in the past with a finance company taking a payment from someone who isn't the person named on the finance agreement so I ended up having to transfer him the money via my phone. He then spoke to the finance company, made the payment and passed the phone back to me. The person on the phone then confirmed they had 'no interest in the car' which is apparently an important statement.
 
MissChief said:
The owner needs to get a settlement figure from his finance company. I've had trouble in the past with a finance company taking a payment from someone who isn't the person named on the finance agreement so I ended up having to transfer him the money via my phone. He then spoke to the finance company, made the payment and passed the phone back to me. The person on the phone then confirmed they had 'no interest in the car' which is apparently an important statement.
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Thanks. When I asked him for some internal photos and any documentation on finance owed on messenger he sent me the pics and a message "sorry not been minted yet" I googled it and it does seem to apply to finance. Never heard that expression used before like that. He said in an email " I can send a settlement letter from motonovo if we get to that point". I've done an AutoCheck on the number plate and that is the finance company listed. Everything else seems fine, it was on a private plate once and the VIN number needs to be entered to confirm but I can do that if I go to buy it.
 
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