buying a car under finance

DBourne · 07-10-2008, 12:57 PM

hi all,
i am looking at buying a car and the owner has told me that it is under finance so I will need to write out a cheque to the finance company and then another for the remainder of the agreed price (very little difference).

can anyone please tell me what steps need to be done and whether this is a situation i really should walk away from?

Thank you in advance.

phoonfan · 07-10-2008, 01:06 PM

First of all get a Rev's check, make sure that there is only one finance company listed with an interest, secondly, have the seller provide you with a payout amount provided directly from the finance company with recent date on it, stating that once these funds have been recieved and cleared they will no longer have and interest. Finaly get a bank cheque payable to the Finance company for the payout amount. Pay the seller the difference!
All should be good!

Cheers

DBourne · 07-10-2008, 03:26 PM

thanks mate, yeah i just did a revs check and there is 1 financial party (the one the owner told me about).

do i hand the cheque to the company? or just hand it to the owner?

also do i need to write to <company> on behalf of <people> ??

do i need any forms from the RTA if i do go through with this, or should the owner have any forms, paperwork needed?

i cant remember what i did when i got the xr

falconboy · 07-10-2008, 03:45 PM

Without stating the obvious, if you know what finance company it is, ring them and see what they will accept.

AusM · 07-10-2008, 05:03 PM

I bought my car in the same circumstances - the bank ended up dealing directly with the finance company and sent them a cheque, giving me a cheque for the seller with the balance.

It was a little tricky because my financing required the car to be insured and to have clear title. This was all sorted by a couple of faxes between the 3 parties (lending bank, old financier, new insurance co.) and was surprisingly painless. A helpful lender is the key - CUA couldn't have been better for me - dealing with one person the whole time, direct phone number etc.

You will need to know what is owing on the car on the day you want to pay it, so it might mean getting your bank to call the old finance co. to get a payout figure for that day. I think my bank faxed a photocopy of the cheque before posting it, to confirm it was on the way... If you have a delay between knowing the debt and paying it, you will have to factor in interest...

DBourne · 07-10-2008, 05:24 PM

awesome, thanks for the reply!!

snakeoil · 07-10-2008, 09:07 PM

The company or finance company will also need to give you a GST invoice for the sale of the vehicle

Not hard at all

Cheers

Pinch · 08-10-2008, 01:14 PM

Yeah the main thing is a cheque being drawn for the payout and made out to the outgoing finance company.

Have sold 3 encumbered cars to be paid out, and bought one. All good. As a seller I put on the receipt:
- that the car was subject to finance and the details, ie to Esanda and contract number,
- that the proceeds of the sale are sufficient to clear any and all encumberances and will be used to do so,
- and the sale is contingent upon the purchaser receiving clear title and some words saying that I will indemnify the purchaser against all claims arising from the failure to clear the debt to the mentioned financier/contract no.

Worded a fair bit better than that, but you get the idea, also provided the REVS cert.

I do this more as a safeguard for the buyer and to give them confidence that I am not dodgy. This sort of thing happens all the time otherwise everyone would always have to wait till they paid out a car to get a new one, and I usually lease new vehicles so in my case that would be never.

The main thing is that you pay the financier out. With people like Esanda it can be as easy as depositing money in a bank account at a local branch - then you know its done but make sure the payout is valid for the day you exchange ownership and pay out.