Buying a 2nd hand car on hire purchase!

[MMike]

hey guys

I was just doing some car researching and came across a few cars which had hire-purchase finance on them and I am uttely, uttely confused. So ive spent the day on the phone to dealers, contacts etc but being a saturday it's been hard getting onto many people and no one could give me a clear answer.

so i thought i'd ask you guys; what is the standard process that takes place if I was to purchase a second hand car currently under 'hire-purchase' finance?

ANY help is much appreciated :)

[M@lew]

You mean the car still has money owing on it?

[MMike]

well yeah
otherwise there would be no 'encumbrance' on the vehicle

[M@lew]

I think it's generally inadvisable to buy a car that still has money owing on it unless you plan to pay the rest off because say that the money never gets paid back by the original owner (or the person who owes money on it) then the finance company can come and take the car back off you.

[MMike]

yeah i read that
however i'm pretty sure that you purchase it, pay X to the seller and Y to the finance company and the vehicle becomes yours?

:confused:

[M@lew]

That's probably what would have to happen if you wanted to clear it of the debt. Just make sure that the total amount equals however much you're willing to pay for the car.

[MMike]

yeah sweet
thanks bud

another thing though, when i make out the two checks, i obviously give one to the seller, and do i send the other one to the finance company myself or..?

[martin]

i think u may hav to go to the finance company along with the owner of the car and the finance company will sort it out for u

[cymax]

Yes Martin, you are right. There many ways on doing this. The best and safest way is to:
1) go to the finance company with the owner and pay off/settle the current outstanding loan
Eg: If Seller X is selling you the car for $20,000. and Seller X has $15,000 outstanding. Go to the finance company with him and pay the $15,000 to finance company. Subsequently, pay the remainder $5,000 to seller X. Easy peasy.

There's no hard buying cars that are currently on loan. It's just how you settle it.

I hope this helps. Cheers.

[MMike]

Yes Martin, you are right. There many ways on doing this. The best and safest way is to:
1) go to the finance company with the owner and pay off/settle the current outstanding loan
Eg: If Seller X is selling you the car for $20,000. and Seller X has $15,000 outstanding. Go to the finance company with him and pay the $15,000 to finance company. Subsequently, pay the remainder $5,000 to seller X. Easy peasy.

There's no hard buying cars that are currently on loan. It's just how you settle it.

I hope this helps. Cheers.

Thanks alot bud. And everyone else in the thread.

However say I was to purchase the car for $20k and they had $6k on top of that remaining, how would I go about picking this up?

Make my full check for $20k to the finance place, and go with them and have them also submit their $6k at the same time?

Cheers :)

[cymax]

Yeap, that's the way how it should work.

Always bare in mind. Make sure that you cover every single cent is cleared.

[OMG.JAI xD]

Another way you can approach it is go to the finance company with details of the vehicle. Find out how much money is owing on it, if such information is not classified.

And when you do know, you subtract that amount from the the amount you agreed on purchasing the car.
ie. agreed price. 20k.
Amount owing 15k
You pay the seller 5K
and you go to the finance company personally and pay it off before you transfer the car under your name.
Recheck for the encumbrances and then transfer the the car under your name once its been cleared.

[cymax]

Haha...His situation is more like the Seller is owing 25k and he is purchasing the vehicle at 20k. The seller has to pay another 5k to finance.
:P