My search for a Yeti continues and I seem to be looking at ones owned (now or in the past) by people I 'know'.

 

There is one about 40 minutes away from me and, having spoken to the owner, has outstanding HPI (with Skoda or their agent) to about the full selling value of the vehicle.

 

He owns a BIG house (and isn't going anywhere), has been upfront about the situation and I do kind of know him from a recent past life.

 

Should I be concerned about this outstanding finance?

 

Is it as simple as making a phone call, me paying the finance company (assuming its less that the asking price) and everyone is happy?

 

I've searched here for HPI and got nothing, but am probably using the wrong terminology.

 

Any advice gratefully appreciated as I am going to see it on Monday.

Yep, if you can pay the finance company from the vendor's house and then drive away with the keys and V5 then there's no reason not to go for it.
I assume the vendor doesn't have enough cash in the bank to pay it off then sell?

I'd be very reluctant to pay the finance off and then have any sort of delay before you take the car.

Agree with the last statement.

I don't know, but I suspect the vendor does have enough cash to pay it off themselves but has set the asking price at the approximate amount owed and is trying to cut out one stage or...

As I know the guy isn't going anywhere it seems to offer some reassurance about me doing it direct.

I would be very careful with this and have a direct chat with the finance company (albeit they may decline to talk to you as it is not your debt).

It may be fine but does not feel right. I would not do it.

Ask yourself this : "If I pay the outstanding debt, at what point in time does the car become mine?" The seller must have paid some of the finance off the car so he still has an interest in it.

If it were me, I would not touch it with a bargepole.

Good luck with whatever course of action you take.

It can be done and many people do it but personally I would look elsewhere or get him to pay the finance and you pay him the asking price.

Take a look at http://www.parkers.co.uk/cars/advice/selling/archive/Buying-a-used-car-with-outstanding-finance/

Interesting thoughts. Thank you for the caution / advice.

Having spent many years in the motor trade my personal & professional view is I wouldn't touch it. You say he has a BIG house and isn't going anywhere..... It might not be his house or he might be in negative equity or even bankrupt. Who knows.

The old adage of "let the buyer beware" should be a warning to you.

I've had so many customers being economical with the truth (being polite) I am, perhaps, being overcautious but at the end of the day it's your decision. Good luck anyway.

When I've done it I've always paid the finance company direct, there and then with the seller beside me on the phone with a debit card.

Then given the seller the balance and taken the car away.

 

That way I have the car, the seller has been paid and the car no longer has outstanding finance.

I've known the guy and his wife for over 6 years (professional acquaintance as opposed to friend) and he has lived at the same mansion for a lot longer than that.

In the back of my mind I'm wondering why he didn't buy outright (service deal & 0% finance possibly?) or why he doesn't clear the finance before selling (financial penalty for doing so?)

Caution it will be on Monday...

Firstly the seller has no legal right to sell the car with outstanding finance as they do not own the car.

Secondly whatever method is used the settle the outstanding amount a written confirmation from the finance company that states that the debt is cleared and they now no longer have any interest in the vehicle is your only proof that it is clear of finance.

 

Lets say that the finance company agrees to take your money in settlement and you pay the balance by CHAPS. The money leaves your account and arrives at the finance companys. All good so far. Then due to an admin mess up in their office they fail to apply those funds to the finance agreement, (it happens!), and you don't get the confirmation. i doubt if you would anyway as the finance agreement is between the finance company and the seller.

 

A month goes by and a payment is missed (obvious as its been paid off) and they then re possess the car. As the paperwork is not in place how do you prove that your payment was against that vehicle.

As an aside also remember that from the 1st October road tax cannot be tranferred from seller to buyer. You will need to purchase tax yourself at the point of purchase otherwise you will be driving an untaxed vehicle (even if it does have a valid tax disc, which is now worthless to you)

I'm glad you raised the issue of tax discs now as I can't find the answer to this question.

 

All car purchases need to be taxed by the buyer on the day of purchase.

 

In order to do that you need insurance.

 

I can insure the car same day - but how do I tax the car same day?

 

I'll obviously have the V5C/2 New Keeper section, but is that sufficient to be able to tax it online using the new system?

 

Does it still depend upon how quickly the insurance company update their database?

Hi Karl,

 

You can tax a car either at the post office with the V5C/2 , on the phone to DVLA (0300 123 4321) or on line https://www.taxdisc.service.gov.uk/ . You will need the 12 digit reference number on the new keeper section. Click on the "I don't have the V11 reminder, then the radio button "New Keeper" and you should be away.

 

Whatever method you choose you will now just get a reference number which will be your "proof of purchase" if done on the phone this will be posted to you.

 

As far as i can remember you don't need proof of insurance when applying for the tax now, its just your legal responsibility to ensure you have it. The vehicle excise duty database and the Insurance database are available to the policing authorities, so once you have started your insurance it should already be on its way to updating the database.

Thank you.

 

I also spotted that calls to the '03' number for taxing your car from a mobile is 10p to 40p per minute...

 

Wonder how long I'd have to be on the phone to get the job done. Or of there is sufficient 3G signal where the car is in order o do it over the internet.

I've known the guy and his wife for over 6 years (professional acquaintance as opposed to friend) and he has lived at the same mansion for a lot longer than that.

In the back of my mind I'm wondering why he didn't buy outright (service deal & 0% finance possibly?) or why he doesn't clear the finance before selling (financial penalty for doing so?)

Caution it will be on Monday...

Karl.

Please exercise utmost caution with this. Your clearing the finance does not transfer ownership to you. The finance company will have no legal or any other interest in the car once the finance is paid. They will be happy to have been repaid and then wash their hands of the car.

If the seller then plays up you have a serious problem on your hands. Big houses and fancy cars are no proof of an individual's financial stability or integrity.

Best.

With this many ways for the deal to go pear-shaped, I advise getting hold of a cider press, then at least you can make some perry from the pears!

Hi Karl,

 

You can tax a car either at the post office with the V5C/2 , on the phone to DVLA (0300 123 4321) or on line https://www.taxdisc.service.gov.uk/ . You will need the 12 digit reference number on the new keeper section. Click on the "I don't have the V11 reminder, then the radio button "New Keeper" and you should be away.

 

Whatever method you choose you will now just get a reference number which will be your "proof of purchase" if done on the phone this will be posted to you.

 

As far as i can remember you don't need proof of insurance when applying for the tax now, its just your legal responsibility to ensure you have it. The vehicle excise duty database and the Insurance database are available to the policing authorities, so once you have started your insurance it should already be on its way to updating the database.

 

Just to confirm this does work, did this yesterday via my phone, bit unsure about it as car was coming up as untaxed so could be their systems being slow, keep a screenshot of the confirmation page.

Dad bought a car privately with outstanding finance. He simply called the finance company, paid the balance, got them to email a receipt to him to confirm there was no outstanding finance now due, paid the seller the difference between finance and asking price and we drove away. No issues..

Dad bought a car privately with outstanding finance. He simply called the finance company, paid the balance, got them to email a receipt to him to confirm there was no outstanding finance now due, paid the seller the difference between finance and asking price and we drove away. No issues..

............and what if the seller had chosen to raise the purchase price of the car, or worse still, declined to complete on the sale?

The point is that ownership does not transfer on payment to the finance company. The seller retains legal ownership until he/she decides to sell.

Hence, this method of buying a car comes with a serious degree of risk to the buyer.

Edited 6 October, 201411 yr by kevberlin

An element of trust is required in most cases.

What happens if you give the seller of a straight buy the cash/transfer and he ups the price.... I've been shafted by a couple of larger firms too.

I bought a golf which had finance outstanding. Paid the finance, they emailed me a receipt and then I paid the remainder.

End of the day it's a transaction like most which carries the risk. If you know the chap that's surely better.

Good luck.

............and what if the seller had chosen to raise the purchase price of the car, or worse still, declined to complete on the sale?

The point is that ownership does not transfer on payment to the finance company. The seller retains legal ownership until he/she decides to sell.

Hence, this method of buying a car comes with a serious degree of risk to the buyer.

Totally agree with the trust issue.

I'm now buying privately with no outstanding finance (different car) and I'm going to have to transfer a large sum to the seller before he hands over the keys and V5C.

What if he takes the money and doesn't hand over the key?

Unlikely in my case. But I've checked his address on the V5C and met, and had coffee, at his house.

A little worrying, but I feel a small risk in my current case.

Pay with cash - you can't beat it.

The thought of walking around with £17,000 cash in my pocket doesn't sit very well.

Do you have access to your bank account online? I've sold and bought cars privately using an online bank account. In most cases, the online transaction is instant, free, and risk free. I wouldn't want to travel around with that sort of wedge on me either. You can test how long it takes by sending a test amount to check how long it takes. Then you can turn up, sign the papers, the seller can witness you make the transfer/ check for receipt of monies, and then you drive away. Don't try doing this on a Sunday mind, as the payment will be processed first thing Monday morning. do it during bank working hours and you;ll be ok.