Help with car loan stuff

[denot]

Hi all,

I was just wondering about this after having a chat with a friend of mine on the weekend...

Basically, he wants to sell his car that still on Car Loan (note: not becoz he cant paid it, but he wants to buy a diff car - which apperently a bit cheaper than his current loan ballance). Is this possible?

I've read this thread, which similar to this one: http://www.ozhonda.com/forum/showthread.php?t=82300

I say he cant, coz his car is still on loan, which means the car legally was owned by the Finance company/bank right? So I told him that he need to pay off his Car Loan 1st (which means pay more than he owns - fees & charges, etc). But he cant paid the whole full amount atm. So here is what I suggest him to do:
1. Take personal loan
2. Payout C/L with his P/L
3. Sell his car
4. buy the other car
5. Since his car worth a bit more than the other car he wants, put the rest of the 'surplus' into his P/L.

Any suggestion on what he needs to do to sell and purchase the other car? btw the other car is private seller, so no dealer trade-in his current car as well...

hope I have a clear explanation on his current situation here. Any help will be greatly appreciated...

[vinnY]

don't take out a loan to pay it off, you'll be paying interest for no reason

just when he sells it get the buyer to make out a cheque to his bank/whoever he owes money and go with them to pay it off so the buyer knows you've paid it off
then the rest of the money goes to your mate after the outstanding loan has been paid and the term is dead

[beeza]

I just went through this.With it being a private sale it's a bit harder compared to buying from a dealer.It's doable if the figures you give the loan company come out as a 'yes' when they crunch them.
See this thread too:
http://www.ozhonda.com/forum/showthread.php?t=86470

[denot]

don't take out a loan to pay it off, you'll be paying interest for no reason

just when he sells it get the buyer to make out a cheque to his bank/whoever he owes money and go with them to pay it off so the buyer knows you've paid it off
then the rest of the money goes to your mate after the outstanding loan has been paid and the term is dead

vinny do you mean that my mate and the buyer go to the bank and payout my mate's loan together?

Ok, here's an example (dunno how much he owe the bank for his car, etc - I just made it up)
C/L balance (after fees): 25k
Sell price: 20k
New car: 18k
===========

so he need to: sell his car for 20k, go to the bank with the buyer 20k cheque and he paid the rest 5k. Then apply for another loan (either P/L or C/L) to buy the new car... does this sounds correct?

so he has to spend: 5k + Loan 18k rather than borrow 23k straight away?

[vinnY]

oh, i suppose i was wrong to assume that the loan wasn't much of a high amount

the problem with most personal loans is that you have to pay to make early repayments because the banks lose money when you don't pay interest on it

in the case where he'll need to take out a loan to buy the other car then yes they'd make a cheque to the car loan people and your mate pays off the last $5k so there's no money owing on the car(i.e. revs says the vehicle isn't encumbered) so the new buyer won't be liable for money owing on the current car

then you'd have to take out another loan for the new car

[denot]

ahh... ic... thanks for the help vinny... much appreciated... ^_^