Buy car with outstanding finance?

khakilad

Hello,

I need some advice on buying a car. I have put down a deposit of £500 on my Mastercard for a car that is costing £33,000. I have asked the dealer if he is willing to wait two weeks for the money which he is. After putting my deposit on the car I had an HPI check done and it came back as the car being leased and money being owed on it.

I checked with the dealer and they said that they are "Brokering" the car for a private owner and that it is normal for finance to be owed on the car and that when I purchase the car the money would be paid to the finance company.

I am just concerned that when I hand over the remaining money and the previous owner doesn't pay the card loan off I will have the car taken away by the leasing company.

Where do I stand on this? Am I entitled to ask for my £500 back if I am not willing to complete the deal because of the HPI check? Also as the amount of the car is over £30,000 it is not covered by section 75.

Any help would be greatly appreciated.

Hintza

Just ensure all finance is paid off at time of purchase. Speak to the finance company if possible. Take a little care but assuming they are kosher you should be able to sort it all out.

Seller could sue you for breach of contract and on a £33k car claim further damages over and above the deposit (unlikely but not impossible).

Should complete all checks BEFORE leaving a deposit.

khakilad

Thanx for your message. Is there no legal obligation that the dealer has to be able to prove that the car is in a salable condition ie it has no finance owing on the car?

Hintza

I have edited my original reply.

But many cars have finance owing until any sale is complete. You just have to ensure that the finance is paid.

forgotmyname

The dealer is brokering the car, So you are actually buying it as a private sale?

No warranty or legal protection?

standupguy

As you have paid the deposit to the dealer rather than the current keeper it looks like the deal will be going through the dealers books.

It is likely that the dealer will not be able to pay the settlement to the Finance company until you have paid him and the monies cleared - this puts you at high risk if the dealer does not then pay or goes bust before he has paid.

The best way around this is to see a settlement quotation on the car and pay the Finance company direct the amount to settle with any excess paid to the dealer.

Hintza

forgotmyname wrote: »

The dealer is brokering the car, So you are actually buying it as a private sale?

No warranty or legal protection?

Very good point!