darlodge

Some of you may have seen my previous post about my troublesome Renault Megane Coupe (used) that I bought from a BMW dealer 2 months ago. From the day I picked it up I have had problems. The main ones being the exhaust system needed replacing after only 2 days and the head gasket blowing a 2 months later and snapping and bending engine components. Thankfully both of the problems have been sorted.

What I want to do is get rid of the car (I think it is cursed ) but I have only made 2 payments (to a total of £488.00) of the total £6434.76 (inc charges) that I owe on credit.

I have never bought a car on credit before so I don’t know what happens if I sell it. What happens to the outstand finance? I have checked and I can pay it off at any time with no settlement fee but how do I go about selling a car that is not mine?

Thanks
Darren

Phil

Basically if you read the finance agreement it will say somewhere

You can't sell the vehicle without settling ANY outstanding balance


So that means you can't

If your buyer has any sense he would do a HPI check which would confirm that it has outstanding finance

darlodge

I take that that means that I could settle the balance my self and then sell it?

What about if I trade it in at a garage? Is that classed as the same as selling it?

Thanks for your reply mate

Darren

Neil Smalley

I thought that..

You buy the car for £8000
you have finance of £7000
Interest payable £1000
You've paid two payments of say 500 quid each.
So actual dept is 7000 quid(+- early repayment charges)

If you sell the car for 8000 quid, you get to keep the grand left over. If you sell for 7000 quid the dept is cleared leaving you with nothing. If you sell for 6000 quid, then you owe the finance company £1000 and therefore the car will be sold with outstanding finance.

If I recall it's only if you owe money after the final settlement figure you need to worry.

Just my vague recollection...

ptholt

I would recommend the following :-

1. either pay off the finance then sell the car if you are able.(all the money from car sale is yours)
2. sell the car and go with the purchaser to pay it off (or let him settle it himself on your behalf but GET proof he has) and get then to give any balance over the settlement to you.
3. sell the car, and settle finance yourself asap as technically you are not supposed to sell it without clearing the finance first, but so long as its done quickly dont worry, buyer may hpi vehicle and see it has outstanding settlement and demands its cleared before he takes delivery (if they have any sense). But finance co will get raging hump if you sell and dont settle, its still there car.

DO NOT DO THE FOLLOWING
1. sell to a dealer and let them settle the finance. Most of the dealers i worked with will happily take your car, but will not pay the settlement out UNTIL they have sold your car. They will not want to give you money for the car and pay off the finance. At the end of the day the agreement for finance on that car is between you and finance co, if you stop paying cos you think a dealier will settle, its you that will get penalties applied and a poor credit rating. DONT DO IT! - think ive made that point clear enough
2. sell the car and decide not to pay the finance off. Technically the car is theres and they will happily reposess from new owner who will come back looking for you in a very bad mood.
3. let buyer take car promising to clear finance. If they decide not to its your credit rating again.

Most sensible buyers will want to see proof the finance is settled before purchasing, whether that means there deposit covers the finance and you show them the settlement letter or you go with buyer to local finance office and pay it off together.

One avenue worth pursuing is calling the finance comapny and asking about returning the vehicle under 'merchantable quality' basically the car is supposed to be in good shape and worth the money they have lent against it. If your problems have been such that it is isn't they can make the dealer take it back or reduce any interest you may incurr in settling, worth a phone call though. I did this with a new Italian motorbike and had all future interest suspended and a reduced settlement figure so i could get out of it easily without causing grief on finance co as you are effectively buying it off them remember so if its a dog and you go to citizens advice or trading standards you could hand the car back under sale of goods act, they will do anything to avoid having the car sitting on there books if its a friday afternoon car.You have said there is no actual 'fee' to settle but are they charging for lost interest over the term etc as this is quite common, also finance companies add there interest charges at certain intervals (quarterly etc) so you may find if it gets to 4 months the settlement may go up and next quarters interest charge is added, definately worth the call re merchantable quality to try and reduce the settlement figure on the basis the car is unfit for the purpose it was purchased for.

If you sell for less than the settlement figure you have to stump up the shortfall, if you sell for more you keep the extra as neil stated.





[Edited by ptholt - 8/20/2002 11:26:06 PM]

[Edited by ptholt - 8/20/2002 11:29:39 PM]

darlodge

Thanks Neil and pholt.

That's what I wanted to be able to do Neil. Basically I want shot of the car but I don't want to sell the car with outstanding finance as it will effect the value of the car any my credit rating which is quite good.

I'll speak to BMW financial services tomorrow morning, they might be able to shed some light on my predicament

I tried returning the car but they did not want to play ball. I was sick or arguing with them at the time so I dropped the whole thing and let them wriggle out of it.

One of my twisted mates (I've got a few ) said that he would torch the car for £50!! As my finance policy has GAP insurance!! Bit drastic I thought.

Thanks for the replies everyone. Scoobynet is GREAT

Darren

ptholt

Not a case of playing ball, any item purchased from a shop or dealer has to be fit for the purpose it was purchased for a 'reasonable' amount of time. If it is unfit you are perfectly within your rights to return the goods and ask for a refund.

Many car dealers seem to think if its a used car its just tough, but ive had a car and a bike that i've handed them back the keys for and backed out of (one new bike, one used car). They dont like it, but its law.

The bike company were fine, the car company wanted to go to court but i worked at a top city law firm at the time and they crapped themselves when they got the letter from them.

Basically talk to finance company, tell them you are not happy with the state of the car, tell them everything that has broken and tell them its unfit for the purpose you bought it.
Then call the garage and tell them you have spoken to the finance company, you will soon be calling trading standards and citizens advice and a solicitors letter will follow suit.

Then write to finance company and dealer, explaining for what purpose you bought the car and why its unfit for that purpose and give them x days to collect vehicle and arrange a refund. Tell them what has happened, what you want doing (refund) when they have to refund by and what happens after that (solictor), quoting sale of goods act etc is always nice.

Shouldnt be a prob from what im hearing, i returned 7k worth of golf gti that blew up in first 2 months on the above basis.

But confused how having outstanding finance will afftect the value of your car? cars only worth its book value whether it has finance on it or not......
also your credit rating wont be affected so long as you keep making the payments on time till its settled. Nothing they can do then. If you also return the car as stated above and the finance gets cleared you may find you have a better credit rating as you have successfully finished the agreement with 0 late payments etc


[Edited by ptholt - 8/20/2002 11:39:45 PM]

sillysi

Just to add, I was thinking of selling my WRX which I purchased on a PCP from Subaru. I rang IM and they told me that I can sell the car as long as I pay the outstanding finance to them within 4 weeks of selling the car. They suggested that I get the purchaser to send them a bankers draft and they would then hand title of the car to the new owner.

JoeyDeacon

When I sold my Impreza to a (Subaru Main) dealer earlier this year it still had outstanding finance on it. The price I got for the car ment I had about £500 negative equity in the car so I obviously had to make up the difference.

Anyway they said they would pay off the finance for me so I gave them the letter from IM finance showing the outstanding amount owing on the car and also gave them a cheque for the remaining £500. Did seem pretty odd at the time paying a dealer to take the car off my hands!!

Anyway about 2 weeks later I phoned up IM finance to check the car had been payed off and they told me the finance hadn't been settled. They did tell me that the dealer had been in contact with them to get a final settlement figure but that was all. At this point I started to get a little concerned but thought it's a Subaru main dealer so I have nothing to worry about. Phoned up the dealer and they told me it was an oversight and that I was OK as another payment wasn't due out of my account for two weeks (should have realised what they were up to at this point!)

To cut a long story short they were in no hurry to pay the finance and I got so annoyed with them I told them I wanted a signed letter from the manager on headed notepaper saying that they had payed off the car. They gave me this saying it had been payed off on the Thursday so on the following Monday I phoned up IM finance again and surprise, surprise they had heard nothing. The woman on the phone joking said my history file with them was absolutely massive due to the amout of correspondance I had had with them checking my account. In the end after nearly 4 weeks of hassle they finally paid off the finance the day before the next payment was due out of my account.

If you could do without the hassle and stress of worrying if the finance has been settled (£13,100 in my case) may I suggest you DON'T let the dealer settle it for you. As stated above they only want to pay once the car has been sold.

And this is from a main Subaru dealer, what do you do if the dealer goes bankrupt or just refuses to pay?

Remember trust nobody!!!

ptholt

The problem is lets say a dealers offered you 6k for your car.

If your settlement is say 4.5k, the dealer therefore gives you 1.5k and a promise to settle the finance and the car is his. There is to much temptation for him not to settle the 4.5k with the finance company, why pay the other 4.5k when its not his agreement so he won't get any grief, plus why pay out and let the car owe you so much more, so he sits on it till he sells your car for 7k then he will settle. (NOTE: some less than reputable dealers will still delay settling even after this stage).





[Edited by ptholt - 8/21/2002 11:06:02 AM]

MarkO

JoeyD - strange. I had exactly the same thing, with a Subaru main dealer (Bell & Colvill). Having sold the car back to them, they said they'd arrange to clear the finance. Having had a close relationship with the dealership, I stupidly trusted them and left them to get on with it, enjoying my new STI in the meantime.

4 months later my (now) wife opened a telegram from IM Finance telling me that no payments had been received during that time, and as such they were starting legal proceedings and would be coming to repossess the car if the whole settlement figure wasn't paid withing 7 days.

She was naturally very distressed (thought the letter referred to the new car, and that we were in some financial hole which I'd not told her about).

After some frantic phone calls and a large amount of ranting to Bobby Bell (of B&C) it turned out that their man had 'forgotten' to send the cheque to IM Finance. [img]images/smilies/mad.gif[/img] Even worse, they'd not sent the registration docs in either, so the car was still registered in my name - despite having already been sold! [img]images/smilies/mad.gif[/img]

I was naturally very annoyed, although to their credit B&C did make it up to me with a free set of tyres for the new car, 2 cases of wine and a very large bouquet of flowers for my wife.

But it goes to show, you can't trust anyone...