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Selling Car With Outstanding Finance


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Hi guys,

Just wondering if you can help me out, the other half, brought a brand new car 3 years ago on finance. The agreement is coming to an end next month.

I believe she has 3 options, keep the car and pay off the outstanding finance, return the car to VW or exchange for another vehicle.

We decided to pay off the outstanding the finance with the sale of the car privately....

My question is do we need to pay the finance off prior the sale of the vehicle? (Not currently feasible as we don’t have the funds)

Or can we pay the finance of as soon we sell the car, which means the car will be in the new owners hands when we on the phone to the finance company...

Im sure you have more experience of this then me... and advice would be much appreciated.

Thanks

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I guess the new buyer of the VW would settle the balance with the finance company directly- and you will get any cash that's leftover (once the balance with the finance company has been settled first).

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Legally you are not allowed to dispose of a vehicle whilst there is outstanding finance owing on it.Also if the buyer carries out an HPI type check on your car this will show up on the report.Hope this helps.

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I am currently selling my 2008 Honda Civic Type R which has outstanding finance on it. I contacted Honda finance as as long as I pay the outstanding money within 7 days of the new owner taking delivery of car is fine.

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I am currently selling my 2008 Honda Civic Type R which has outstanding finance on it. I contacted Honda finance as as long as I pay the outstanding money within 7 days of the new owner taking delivery of car is fine.

That's ok for you to say, but what if you fail to settle the outstanding finance with Honda finance (not saying you would) and the new owner takes the car? Honda finance would be knocking on the new owners door in order to reclaim the car.

If I was buying your car I'd settle the outstanding balance directly with Honda finance and any monies remaining would be paid to you.

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I am currently selling my 2008 Honda Civic Type R which has outstanding finance on it. I contacted Honda finance as as long as I pay the outstanding money within 7 days of the new owner taking delivery of car is fine.

That's ok for you to say, but what if you fail to settle the outstanding finance with Honda finance (not saying you would) and the new owner takes the car? Honda finance would be knocking on the new owners door in order to reclaim the car.

If I was buying your car I'd settle the outstanding balance directly with Honda finance and any monies remaining would be paid to you.

No they wouldnt the finance is in "my name" so they would come to my door! The new owner would not be liable for anything as Honda would not have his details unless they went through the DVLA to trace the new owner.

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I am currently selling my 2008 Honda Civic Type R which has outstanding finance on it. I contacted Honda finance as as long as I pay the outstanding money within 7 days of the new owner taking delivery of car is fine.

That's ok for you to say, but what if you fail to settle the outstanding finance with Honda finance (not saying you would) and the new owner takes the car? Honda finance would be knocking on the new owners door in order to reclaim the car.

If I was buying your car I'd settle the outstanding balance directly with Honda finance and any monies remaining would be paid to you.

No they wouldnt the finance is in "my name" so they would come to my door! The new owner would not be liable for anything as Honda would not have his details unless they went through the DVLA to trace the new owner.

and thats exactly what they would do and then the new owner would come out one morning to the car being gone......a close friend of the family reposes cars like that all the time and the new owner hasn't got a leg to stand on as the company will just go after the car....

most people will be put off by the outstanding finance......

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Ormi is right- the finance company would either want the money (outstanding finance/balance) or the car in the event of non payment of the outstanding finance- it doesn't matter who is the registered keeper.

A family member bought a car a few years ago with outstanding finance on. The previous owner (who my family member bought the car from) told my family member they would settle the outstanding finance with the finance co- they didn't and the finance co came to my family member to reclaim the car.

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most people will be put off by the outstanding finance......

You sure you mean everyone or you as a person?

as said MOST people, most in no way means everyone....well it didn't when i was at school??

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most people will be put off by the outstanding finance......

You sure you mean everyone or you as a person?

as said MOST people, most in no way means everyone....well it didn't when i was at school??

My mate has just bought an Audi RS4 privately. He asked if anything was owed, there was, and he did the HPI check. He bought the car by paying off the finance owed to the finance company and gave a little cash to the owner. Anybody buying a car privately should HPI. If your selling a car with finance owing just be honest and offer the information to the prospective buyer. He/she will then see you as honest and shouldn't really be bothered who they have to pay to own the car. If you sell for 10k and owe 6k the maths are easy.

I would insist on paying the finance company rather than give the cash over to the seller and hope that they pay off the car.

Most people with common sense would do this.

With regard to the OP let the buyer know before hand the situation and give the details. You should sell the car no problem.

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most people will be put off by the outstanding finance......

You sure you mean everyone or you as a person?

as said MOST people, most in no way means everyone....well it didn't when i was at school??

My mate has just bought an Audi RS4 privately. He asked if anything was owed, there was, and he did the HPI check. He bought the car by paying off the finance owed to the finance company and gave a little cash to the owner. Anybody buying a car privately should HPI. If your selling a car with finance owing just be honest and offer the information to the prospective buyer. He/she will then see you as honest and shouldn't really be bothered who they have to pay to own the car. If you sell for 10k and owe 6k the maths are easy.

I would insist on paying the finance company rather than give the cash over to the seller and hope that they pay off the car.

Most people with common sense would do this.

With regard to the OP let the buyer know before hand the situation and give the details. You should sell the car no problem.

OK - First things first. The third party (the new owner or buyer is NOT PARTY to the original contract).

The contract is between the individual who took out the finance and the finance company - THAT'S IT.

Having said that the finance company will have a lien on the motor vehicle and in the event of non payment have full rights to repossess the car no matter who allegedly owns it at the time. It is similar to a mortgage in as much as the mortgage company has first rights on the property even if you only owe £5 on it !!

The finance company is under no obligation to accept a payment from a third party and expects the original party to the contract to make payments/settle outstanding debt.

Personally if there is any outstanding finance on a vehicle I wouldn't touch it with a barge pole, you run the risk of opening up a legal can of worm and unless you are VERY clear on the understanding of the terms and conditions of the contract in question you could find yourself severely out of pocket.

If you are in doubt and you still want to proceed with a purchase I suggest you insist on seeing the contract (although the vendor is under no obligation to show it to you and even under the terms of the agreement may be breaking a clause in the contract by disclosing it to a third party)and then utilize the services of a good solicitor who is fully conversant with contract law.

The Ed

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