Buying a car with outstanding finance

[pdk42]

Can anyone provide any guidance on buying a used car with outstanding finance? I’m looking to buy a used Y from a private seller but the car is still on a PCP. The seller seems totally genuine and I have no concerns that I’ll be ripped off, but I’m unsure of the process.

He's proposing that once he has my payment he’ll immediately clear the finance by an on line payment to the finance Co with me observing.

But what happens next? I’m assuming that the car is currently technically owned by the finance company and that they have the V5. So if the seller clears the balance they’ll presumably then issue the V5 in his name, which then means he’ll need to then transfer it to me. I’m guessing all this could take weeks.

Does that sound right? And how do I insure the vehicle while all this happens?

Or have I got it all wrong?

 

[Lord Farquad]

If it’s on a PCP the V5 will be in their name.

If they pay it off it’ll take a few days/weeks to get confirmation but then that’s it.

However if they rip you off it’s a civil case to pursue.

I’m sure someone on here will know the best way to deal with it, but the V5 is the easy bit. No different to a fully owned car.

 

[NewbieT]

Risky as. The terms of a PCP usually prohibit the sale of the car until settled.

Ask the finance company to novate the PCP contract into your name as part of the sale and then settle the finance afterwards.

 

[Tony Hoyle]

If he doesn't clear it the finance company could take the car back and you'd be left with nothing.. the loan is secured against it.

As mentioned they may not be able to sell until it's cleared anyway.

Tell them to get a loan, clear the PCP, then pay off their own loan with the sale proceeds. The interest over short term loan like that will be tiny.

 

[Js1977]

First of all, always HPI the car regardless for your peace of mind and you do get some security as well. If it's on finance, the finance agreement number will be on there and who with.

If the seller does not have the money to settle, you can call the finance company (preferably with the seller next to you) and settle.

If they say they will settle, its the same game and you can speak to the finance company to check as it will take some time to clear from HPI.

If you're wearing the tin hat then you're good to go...phone the finance company from your phone, give them the finance agreement and explain that you are buying or checking and go from there.

 

[pdk42]

First of all, always HPI the car regardless for your peace of mind and you do get some security as well. If it's on finance, the finance agreement number will be on there and who with.

If the seller does not have the money to settle, you can call the finance company (preferably with the seller next to you) and settle.

If they say they will settle, its the same game and you can speak to the finance company to check as it will take some time to clear from HPI.

If you're wearing the tin hat then you're good to go...phone the finance company from your phone, give them the finance agreement and explain that you are buying or checking and go from there.

That sounds like a sensible approach. Thanks.

 

[Js1977]

That sounds like a sensible approach. Thanks.

Ive done this a couple of times. Once from a from a private sale and once from a dealer which they will sometimes also have their vehicles on a special dealer finance until they sell

 

[ajmorr.is]

From the other perspective in the past I've sold a car still within a PCP deal and I was very clear and upfront to the buyers about this - it definitely put some people off but my only other option at the time was to take out a short term personal loan and pay the settlement figure myself before selling. The eventual buyers came to look at the car, liked it and made one payment directly to the finance company after a settlement figure had been given on the day (they can vary by day due to accruing interest, but sometimes will be valid for a period of time) which as I recall was done by them over the phone once I had passed the security verification checks with the finance company. The smaller remainder of the payment was then made directly to me.

As mentioned above, PCP finance has the vehicle & V5 registered to the person who took out the finance and should be in their name and address, so they can assign it to you immediately online now for you to tax before driving away.

 

[pdk42]

From the other perspective in the past I've sold a car still within a PCP deal and I was very clear and upfront to the buyers about this - it definitely put some people off but my only other option at the time was to take out a short term personal loan and pay the settlement figure myself before selling. The eventual buyers came to look at the car, liked it and made one payment directly to the finance company after a settlement figure had been given on the day (they can vary by day due to accruing interest, but sometimes will be valid for a period of time) which as I recall was done by them over the phone once I had passed the security verification checks with the finance company. The smaller remainder of the payment was then made directly to me.

As mentioned above, PCP finance has the vehicle & V5 registered to the person who took out the finance and should be in their name and address, so they can assign it to you immediately online now for you to tax before driving away.

Thanks. I think that's exactly what I'll do. The seller has likewise been entirely up front about the PCP and I am pretty confident that he's a bona fide seller who won't rip me off. It's just a case of figuring out the best way and safest way to do it that doesn't cause messy complications.

 

[Jason71]

Thanks. I think that's exactly what I'll do. The seller has likewise been entirely up front about the PCP and I am pretty confident that he's a bona fide seller who won't rip me off. It's just a case of figuring out the best way and safest way to do it that doesn't cause messy complications.

This guy is probably genuine but as a matter of course I would draw up a document to confirm what is happening and both sign on to it. I am sure a lawyer would tell me that wont stand up but in the unlikely even that you settle with the finance company in theory the buyer could refuse to hand over the car if they were dodgy. Having something in writing to confirm the agreement between you would not be a bad idea.

 

[ACarneiro]

Yes, it's a sad sign of the times when you have to assume bad faith on the other party..... but then again if scammers looked like scammers they wouldn't be very good scammers, would they?

Now where did I put my tin foil hat?

 

[Jason71]

Yes, it's a sad sign of the times when you have to assume bad faith on the other party..... but then again if scammers looked like scammers they wouldn't be very good scammers, would they?

Now where did I put my tin foil hat?

I bet you all just leave your doors unlocked in Shrewsbury

 

[ringi]

Tell them to get a loan, clear the PCP, then pay off their own loan with the sale proceeds. The interest over short term loan like that will be tiny.

One of the few times that a cash advance on a credit card can work, if banks don't trust then enough to give them a loan then avoiding doing business with them.

 

[ACarneiro]

I bet you all just leave your doors unlocked in Shrewsbury

More often than I should, maybe....

 

[Js1977]

This guy is probably genuine but as a matter of course I would draw up a document to confirm what is happening and both sign on to it. I am sure a lawyer would tell me that wont stand up but in the unlikely even that you settle with the finance company in theory the buyer could refuse to hand over the car if they were dodgy. Having something in writing to confirm the agreement between you would not be a bad idea.

The guy selling the car is not the legal owner until he settles the finance. On the same coin he could settle the finance, take your money and refuse to hand over the car. On the flip side you could be the dodgy one trying to obtain the car with dirty cash and so on.

Once you have transacted (from your account) the money either with the finance company or the person directly (if they already settled) this makes you the legal owner. in most cases you would draw a simple receipt with the names, reg number, sold as seen etc.

Always HPI the car, this also gives you a guarantee when you then input the vin and make sure the car is registered at the address where you are buying from and or check the persons ID.

My personal preference here would be to settle with the finance company myself. Its really straight forward hence why the credit agreement will show on the HPI.

I think allot of the time, its for reasons mentioned here that allot of cars either get traded in on the cheap or end up with the likes of WBAC.

 

[Jason71]

Can anyone provide any guidance on buying a used car with outstanding finance? I’m looking to buy a used Y from a private seller but the car is still on a PCP. The seller seems totally genuine and I have no concerns that I’ll be ripped off, but I’m unsure of the process.

He's proposing that once he has my payment he’ll immediately clear the finance by an on line payment to the finance Co with me observing.

But what happens next? I’m assuming that the car is currently technically owned by the finance company and that they have the V5. So if the seller clears the balance they’ll presumably then issue the V5 in his name, which then means he’ll need to then transfer it to me. I’m guessing all this could take weeks.

Does that sound right? And how do I insure the vehicle while all this happens?

Or have I got it all wrong?

OK. Now make us all feel bad by telling us how much you are getting it for

 

[ACarneiro]

OK. Now make us all feel bad by telling us how much you are getting it for

"One Hundred Beel...." you know how it goes....

 

[GeorgeSymonds]

I sold a car to a dealer which had finance on it. They insisted they cleared the finance and I had the balance. Get the person to provide the details of the balance - and ensure it’s based on the specific date you intend to purchase, and then when you’re picking the car up you pay this and the balance to the seller.