Cars with outstanding finance?
 

How does this work then?

I've seen an 03 STI near me for sale but the ebay advert says it has outstanding finance to be settled when purchased.

But the car is owned by the finance company, yes?

How do you deal with the car and the money?

Would I pay the finance company off and give the seller any left over money?

You wouldn't give it to the seller in case he didn't pay the finance company.

Personally it would but me off buying it but I am very suspicious, I would pay the finance company direct over the phone with a debit card and give the seller the rest if I really had to buy a car this way

I did this a couple of years ago, had no choice as had been made redundant and there was no way i was getting into $hit with the car, had enough problems with the mortgage company as it didnt meet the terms of their insurance??
A guy came round and wanted it, i explained the situation to him, he agreed to take the car, so i got him to ring the finance company from my phone, paid them off in full, and gave me the balance, i had access to a fax machine at the time so they faxed across all the paperwork to say finance cleared, job done.
Should be even easier now as they could email it instead.
Had to get the buyer to phone them to prove i wasnt pulling a fast one.

It can be done, but you have to get permission from the finance company first.

Wouldnt normally have done anything like this, but times were hard

The law is clear (this is the actual law, not what people tell each other in pub or now, on forums). When you buy a car which has outstanding finance (but not a 'logbook loan' as this uses very different archaic bailment law) in ignorance, or where youre told that it will be settled and it isnt, then you obtain good title to the car.

This means that the car is yours and cant be taken off you under any circumstances (although some firms employ people who try and the bluff sometimes works).

The sceptical should Google The Hire Purchase Protection Act 1964, or buy 'Which - 401 Legal Questions Answered' from WHSmith... :D

Ive also seen the said car this morning and was also wonderiing the same thing with regards to the finance.

By the time I got the keys and they came knocking I would have broken it for parts anyway LOL.

Rob

refinance
 

Ive brought a 220 coupe years ago had i paid the finance company and gave him the outstanding amount so i knew the car would be clear

Quite right Simon.:thumb:

Cheers for that - very useful fact rather than the old wives tales I previously understood to be the case. Assuming you buy a vehicle with a V5 then, does that pretty much mean that you don't need to worry about outstanding finance?

It doesn't really put me off as such but I want to make sure I don't have any problems with it - if I were to buy it, I've really been thinking WRX rather than STI but it is just down the road and sounds decent enough.

Interesting info from GC8 - didn't know that and worthwhile remembering thats for sure.

Watching a thread on another forum regarding exactly who owns a car as the new V5s point out that the V5 isn't proof of ownership.

I presume you need written evidence that the original owner will pay off the outstanding finance or you could find yourself liable to pay it yourself as the new owner, or the person who has title to that car anyway.

Les

When you are in possession of something, then you need not necessarily have to prove rights of ownership. It will be commonly assumed by all around that you can do what you like with it and the onus of proof to the contrary will fall on the person not in possession but asserting ownership to prove that you don't own it. What's more, under common law it might become yours with the passage of time (twelve years) through adverse possession simply by hanging on to it and using it as your own.