RS Grant

..one of my friends asked me this and I couldn't give him an answer apart from "its surely illegal".

He is looking to buy a car from one of our friends, problem is that this car has outstanding finance on it and the 2nd problem is that my friend doesnt have the amount needed to clear this off.

I'm not sure about the exact figures, but using some fake figures, the plan they have hatched together is this:

The outstanding finance on the car is 10k, however, Mr X only has 5k. So, they have decided that Mr Y will take the 5k and put it towards the finance outstanding and sign the V5 registration document over to the new owner, Mr X. In the meantime, Mr Y will receive money from Mr X to cover the outstanding payments until the remaining 5k outstanding is paid off.

What are the problems with this plan?? Am I right in thinking that the Finance Company are wise to this and will be informed by the DVLA when a change of owner happens on a car they still 'own'. My friends seem to think that all will be well if Mr Y just keep his mouth shut and continues to make payments as normal.


Cheers,
Grant

Brun

Why not just ring the finance company and see if the remaining finance can swapped over to the new owner????

jaytc2003

iTrader: (1)

the problem will be if mr y decides not to pay the money that has been payed to him by mr x and instead keeps it. The car will then get repossed and mr x will lose everything

fivetide

iTrader: (1)

Or it gets wrecked for whatever reason. Payout to finance company if at all as i'm sure the insurance company will refuse to cough up and tantrums will ensue.

dinnae do it.

5t.

Terminator X

iTrader: (7)

What about if / when they fall out? Steer well clear IMHO. So many cars out there with no finance ...

TX.

The Trooper 1815

iTrader: (31)

https://www.scoobynet.com/non-scooby...-your-car.html

Not Buy but to Sell with notification yes.

Luan Pra bang

very simple ring the finance company while both are there get a settlement figure get the buyer to pay it then hand over whats left to the old owner.

Terminator X

iTrader: (7)

^^ It's a negative equity situation ...

TX.

GC8

Dont feel picked on, as many people believe this (and have and will post it), but it isnt so.

The law is very clear on this issue and if you were honestly ignorant or you were mislead and told that the finance had been or was being cleared, then you do have good title to the vehicle. In this circumstance the vehicle can not be repossessed and you are not obliged to check with HPI or similar companies before buying.


Simon

billythekid

Having the V5 means d1ck. The reg keeper may not be the legal owner, and in this case the finance company would still be the owners.

The only way I would buy a car with existing finance is if the finance was paid off either by the current owner or by me before I took the car (with payment going stright to the finance company of course) so it was clear when I came to buy it.

fatherpierre

Barge pole, and not touching with one springs to mind.

subaruturbo_18

is the outstanding finance worth more or less than the car?

RS Grant

Thanks for the replies, have passed on the info.. and seems to be a general feeling that this is too dodgy for them to take forward. They've been friends since they were in primary school and are more like brothers, so dont think they'd fall out, however who can tell what the future holds.
Plus, the big thing that would put me off this idea is the thought of possibly voiding the insurance in case the worst happened..... just hope that they take the sensible option and decide against it, but end of the day its up to them I suppose.

I think the car is worth slightly more than the outstanding on the finance, we're talking 2k of equity best case.

I hadn't thought about recommending a 'swap' of names on the finance, thats defo something for them to look into.. to try and keep it all above board.


Cheers,
Grant

Skoobie Dhu

iTrader: (3)

This is what I did when I bought a BMW a number of years ago - wasn't a problem.