Any car finance experts? Car we want to buy private has finance still on it!

[fluff48]

Hi guys

Looking for some advice please. A car my daughter wants to buy privately is still financed. Only found out after doing an HPI check.

When they go to see it tomorrow, the owner will need to pay off the finance tomorrow (they have the settlement figure) before we bank transfer them the money. The owner is borrowing money to pay off the car but will only pay off the car we agree to buy it and pay them after they pay of the finance. So she can repay the person lending her the money immediately.

The finance company (BMW) said it won’t know for up to 24 hrs if the money has been paid off. BMW has given us their bank name, sort code & acct number that she should be paying it to.

We need proof the money has been sent to BMW. Thinking of asking to watch as she enters the bank details (will either be the details we have or the details on the settlement) then seeing on her bank app that the payment has been processed.

Also thinking of typing up a document that both parties sign (copy for both of them) confirming XXX has made the settlement payment to the finance company on XXX and that previous owner will be responsible for any pursuit made by the finance company should the finance not be settled in full.

Does that seem reasonable or does anyone else have any other way to get around this?

Cheers
Fluff

[Bootrip2]

I’m not sure of legal side of it, i wouldnt touch a car with another persons finance still active on it, far too risky. I would imagine a document you draw up without a solicitor etc would hold no weight in court. I could be wrong though.

[Floridarules]

Personally I wouldn’t buy under these circumstances. They need to pay off the finance and then you should wait for a £0 balance showing on the HPI check. I would not hand over any money until you have confirmation.
I suspect that the current owner won’t be able to sell as it unless they agree to see to a garage due to the risk.
Not much help sorry, but I would be wary. Hope you get it sorted.

[Bootrip2]

Sorry misread post

[arielrocks]

We had this EXACT same scenario when I got my golf a few years ago. Outstanding finance and the guy needed to clear it before he could sell it

He borrowed the money to pay off the loan, I spoke to the loan company on the phone to confirm it was cleared and settled in full, copy statement was emailed out which I also had , then I paid him for the car.

It was all fine. You just have to be sure that you have confirmation from the finance company, which they should be able to email to you / seller prior to you parting with your cash.

[Mikeandrach]

Very common situation, ignore the people who say avoid.

Easy solution is you pay off the finance, you send the payment from your account (or call and use your card with the owner there), then you pay the balance to the seller

No risk to you at all

[fluff48]

Thanks everyone.

Problem is, they want us to pay for the car as soon as they pay the settlement. They aren’t willing to pay off the loan tomorrow (after we confirm we are taking the car) then wait the 24 hrs for BMW/hpi check to confirm it’s paid off to us.

Hence my suggestion to make sure we see them making the payment to BMW then have a covering agreement incase they have done some scam where the loan hasn’t been paid off.

BMW did say that if we have our part of the V5 then they would pursue the seller for payment rather than impound the car but I’m not 100% convinced of that. They will want the money/car from someone.

DD’s heart is set on this car 😱

[fluff48]

Originally Posted by Mikeandrach

Very common situation, ignore the people who say avoid.

Easy solution is you pay off the finance, you send the payment from your account (or call and use your card with the owner there), then you pay the balance to the seller

No risk to you at all

See more...

I suggested this to the finance company as another option but they were non committal. Although we don’t want to be in a situ where we pay off their debt then they press us for more than the balance we have agreed.

We would normally go to a garage but the car she is after tend to be down south and are more pricey.

[fluff48]

Originally Posted by arielrocks

We had this EXACT same scenario when I got my golf a few years ago. Outstanding finance and the guy needed to clear it before he could sell it

He borrowed the money to pay off the loan, I spoke to the loan company on the phone to confirm it was cleared and settled in full, copy statement was emailed out which I also had , then I paid him for the car.

It was all fine. You just have to be sure that you have confirmation from the finance company, which they should be able to email to you / seller prior to you parting with your cash.

See more...

This would be the sensible option if only we could persuade them!

[Feebee2]

Originally Posted by Mikeandrach

Very common situation, ignore the people who say avoid.

Easy solution is you pay off the finance, you send the payment from your account (or call and use your card with the owner there), then you pay the balance to the seller

No risk to you at all

See more...

Would you transfer ownership first. I wouldn't like to think I was paying someone's car loan off.