Buying a car privately with finance owed - proper way to clear it?

jm0221

Hi,

Looking for the proper way of buying a private car with finance owed. I'd rather not leave a cheque for X amount in the understanding the seller is going to clear the finance once the cheque clears and I can take the car. Is it legal to sell a hire purchase car this way?

I've read you can get the seller to phone the finance company, get the final settlement figure and the buyer has a special code/username to pay in 24hrs by debit card and then take that figure off the agreed selling price. Is this the normal practice if the seller hasn't the funds to clear the finance and own it outright to sell it legally. I do trust the guy but it is a lot of money and rather do it above board.

Thanks.

jm0221

Noone had to do this then? Thought it might be more common

Easymoney

It all depends what it states in the original finance agreement.

if the owner has paid over a certain amount then ownership of the car is theirs even with an outstanding amount.

After this value has been paid, any residual amount is an issue between them and the finance company.

You should have a look at the finance agreement on the car.

financebroker

My advice, do purchase any car privatley until the logbook owner has clear title to the vehicle, ensure he settles before you purchase, before you buy any car privatley ensure that you HPI it. My understanding is that they have to have clear title before they sell the car as i said earlier. hope that helps

Easymoney

financebroker wrote: »

My advice, do purchase any car privatley until the logbook owner has clear title to the vehicle, ensure he settles before you purchase, before you buy any car privatley ensure that you HPI it. My understanding is that they have to have clear title before they sell the car as i said earlier. hope that helps

Yes but their title on the log book is just a means for them to be registered keeper of the vehicle, nothing to do with its rightful owner or repossession.

It will be in the Purchase agreement, under repossession and termination rights.

Usually a third of the amount has to be paid before the 'owner' (finance company, Ford etc) can rightfully take back the vehicle without a court order. Assuming the person signed into the agreement has not kept to their side, monthly payments etc.

Usually half the amount has to be paid before the person can hand back the vehicle and owe no more, subject to reasonable state of the vehicle.

As for a settlement figure, again thats for them to organise.

Technically, you could pay the settlement for them and they would hand you the keys and log book, usually the case with a trade in, but if the vehicle market value is less than this, why would you as a private sale? You could make them an offer for the value of the car, any outstanding difference is between them and the finance company.

CV_Writing_NI

Hi,

Having previously worked for a Car Finance company my advise is to ensure the finance is settled before you take ownership of the vehicle. The finance company legally own the car until the final payment is made even though their name is not on the log book.
If it is not settled the finance company are within their rights to repossess the car and you will lose out. Unfortunately I've had to knock on someones door to do it in the past to an unsuspecting new owner of a car, which is not a nice experience.

Regards