Cars under finance

[maverick01]

I'm hoping someone can give me better advice than the keyboard warriors on Facebook.

The missus and I have decided to buy a Holden Maloo R8, we have settled on the price with the seller but I told him that I would be doing a revs check which he had no problem us doing so and said it's currently under finance through his company with capital finance.

He seems to be a genuine seller (60year old couple), they have informed us that they currently can't pay the loan out as there money is tied up with a big business adventure but he said if I wanted to that I could pay his finance company directly and give him the remainder.

When I say he seemed genuine, I meant he allowed the missus to stay in his shed full of trucks, heavy machinery, motorbikes, quads and endless tools when him and I went for a drive, upon returning he then said to take the missus for a drive and never wanted a licence, keys to our current car or anything as security. He said nah it's fine I trust you.


So my question is has anyone had any issues with buying a car under finance and paying the finance company directly and giving the remainder to the seller and then taking the car on the day. I realise I can't transfer the car into our name until the encumberance has been lifted which is about 5-7 business days.


Sorry for such a long post, but I don't want to lose my money plus the car


Maverick01

[D4D]

That's typically how it works when finance is involved. 2 bank cheques, one for the finance co. and one for the owner. You then request a statement from finance co. there is no encumbrance on the vehicle. Also need to check the payout value is accurate.

[MDS69]

I don't know if the seller would be willing or not but get his account details with the finance company then ring them for the payout figure and process from the horses mouth.

It will be as D4D has stated, 2 cheques etc...

[D4D]

I don't know if the seller would be willing or not but get his account details with the finance company then ring them for the payout figure and process from the horses mouth.

Tried this before but they will only speak to the primary account owner. I had the owner call the Finance co on speaker phone and I listened in.

[maverick01]

The seller is happy to supply the bank details for a direct transfer and then give him the remainder in a cheque to him.


My concern is if I pay the loan out fully and give him the remainder is there any chance what so ever that he can redraw on that loan and is there any additional costs that I could be slugged with?


Maverick01

[D4D]

My concern is if I pay the loan out fully and give him the remainder is there any chance what so ever that he can redraw on that loan and is there any additional costs that I could be slugged with?

No, pay out figure is pay out figure. Once it is paid out the Finance Co. will have no further interest in the vehicle.

[maverick01]

Thanks D4D

Do you know if the seller can redraw on that style of finance which is through his business.


Maverick01

[D4D]

Do you know if the seller can redraw on that style of finance which is through his business.

Typically not as each lease will have it's own security (vehicle, machinery etc.) however to be absolutely sure you'd need to speak with the finance co.

[Mik01]

I've done is a few times. If you're paying cash, get the guy to get his finance company to provide you with a final payout figure statement. He should notify them he intends to sell it to you (ie provide your details) and their letter should reference something to the effect that the title or their interest in the vehicle will cease upon receipt of the payment.

Get in writing with the guy that the full payment of the agreed sum is full and final payment of the vehicle (separately itemise your payments - ie we will pay your finance co. xyz$ as per the received payout schedule and the balance cash to your account of xyz$).

Make sure you both sign it.  The main issue you want to avoid is the finance co. security over the vehicle. He won't be able to redraw any money if it's a Car loan thought the bank or finance co.

[Andreweasty90]

Usually when you request a payout figure they process it as the account being fully paid and closed so therefore not allowing a redraw to happen and if it's from a sale of a vehicle they generally won't allow him to redraw on it because there is no collateral. I haven't done it with a car before but several motorbikes and when you call the bank they want their money ASAP to and they close the account


Sent from my iPhone using Tapatalk

[dales133]

I've got the seller to call the finance company to get an updated figure as if the interest is calculated daily you'll need this figure exact anyway.
Get him to do it on speaker phone witch he shouldn't mind if he's on the level.
I've brought and sold vehicles under finance several times before and it's no drama at all providing you have the exact amount calculated on the day of sale because those greedy bastards won't consider the loan paid unless it's exact

[Footy Shorts Shane]

Have you called his finance company and asked them? As mentioned they can't discuss his personal details etc, but surely they could tell you the exact process of what to do and how, when to do so ?

[jwb]

When I bought the Prado they phoned me at the start of the day with a payout figure.
I met them at my bank (NAB) and they came in with me to witness me getting 2 bank cheques- 1 being the payout figure
the other being the balance.
I then went next door with them to their bank (ANZ-Esanda Finance) and witnessed him deposit the payout figure cheque.
I Had printed multiple copies of a purchase receipt stating all breakdown amounts/ dates.

We then signed off on all of the documents and went on our merry way with a copy each!

Cheers

[Kiwijohn]

I don't know if the seller would be willing or not but get his account details with the finance company then ring them for the payout figure and process from the horses mouth.

It will be as D4D has stated, 2 cheques etc...

If the Finance company do this report them to the Banking Ombandsman as they are breaking the law.

All other above advise is correct, just get the payout figures in writing for the future date for when transaction is happening and make out chq to finance company and loan a/c number. There is also no reason why full chq amount cannot be made out to finance company with current owner getting refund from them, this is the way I would do it - that way if it takes 2 days to Bank chq no issues and there is an incentive for courant owner to repay loan.