Any special concern buying 2nd hand vehicle.

Hi All,


This is my first time buying second hand car from private seller. I have deposited couple hundred and just find out that the car is still on finance.

Do you guys know if there is anything I need to concern buying this car?

I will handed the rest of the balance in bank cheque, do I need to write the payee of the cheque for Finance company which the cars leased from or just the seller's name ?

Help on this is appreciated as I have never buying car that still in finance before.

I live in Melbourne, not sure if there is special regulation regarding buying car that is in finance here in Victoria.

Thank You.

any advise?

best thign you can do is get a NRMA Inspection. NRMA = insurance company. get them to check it out

then tell him to pay off the car first !
then you check if he has here
http://www.revs.nsw.gov.au/
and hten pay him for the car.

or

you can split hte check, pay the finance company, and pay the remaining to him

Quote:

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Originally Posted by sismic

Hi All,


This is my first time buying second hand car from private seller. I have deposited couple hundred and just find out that the car is still on finance.

Do you guys know if there is anything I need to concern buying this car?

I will handed the rest of the balance in bank cheque, do I need to write the payee of the cheque for Finance company which the cars leased from or just the seller's name ?

Help on this is appreciated as I have never buying car that still in finance before.

I live in Melbourne, not sure if there is special regulation regarding buying car that is in finance here in Victoria.

Thank You.

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Yes mate you must make the cheque payable to the finance company to cover yourself. Talk to your bank about this, they do it all the time.

a REVs check is always the way to go before buying a car privately, they check if there's any outstanding loans on the car (i used to work for REVs), for a small fee, its definitely a way to go.

yes ZCO is right, i would do an inspection (RACQ is the most popular one here in brissy).

ZCO and T-onedc2 are both correct in saying to make the cheque payable to the finance company (and whatever the rest to the seller). the best way is to ask the seller to get the most recent quote (either via a tax invoice, statement or a letter) from the finance company of how much is ACTUALLY owing at this stage...the most recent quote will give u the most accurate amount still owing. on the back of the cheque, write down as much details as u can like the name of the seller, the account number, etc, so when the finance company gets the cheque, then they know it is to pay that particular loan off.

to make sure that all is good, then get the seller to check with the finance company that everything is paid-up (at least 3 days later - coz the cheque needs to clear first), then get the seller to ask for a LETTER to say so, then ask for a copy of that letter.

hope this helps.

Excellent feedback to you all :thumbsup: . I finally made the cheque payable to finance company .


Thank You.



,
Mike

Smart move. Or else the bastard couldve run off with your money, whilst you also have to pay the car off as well.

This is a very good answer to everyone,help me out too as i am going to buy a car under the exactly same situation too.
i think it should put in sticky :)
Nice one!

Also get a receipt from seller stating that all outstanding finance will be paid off at their expense.

I know of one mate, who bought a car after having a REVS check but the seller used the car as security on a loan before my mate picked up the car. It did get paid out but it COULD have become a long drawn out problem.

when purchasing a second hand car, what's the best way to go about it after agreeing to purchase at a particular price?

would it be something like this?

1. Write a receipt of sale (binding contract) with the model of car sold, sale date, contact information for buyer and seller, price of car, VIN, engine number

2. Get all forms ready (transfer of ownership, etc) from VicRoads or RTA

3. Netbank/cash/cheque the money to the seller

4. Pick up the car

or is there something i missed?

also, there is a duty which needs to be paid when purchasing a car. is there a way of lowering this duty? ie. writing a lower price on the receipt than the actual purchase price?

dan lee you pretty much got it summed up...

best would be to get a bank cheque written up, that way when the cash goes to the seller the keys go to you.

You can lower the duty by declaring a lower purchase price than you did purchase it for. However i think it may be classified as fraud, that said MANY people do it anyway. However with all this stuff there is always a paper trail. Ie, if you declare you paud 10k for your ITR, i am sure you insurance company could find out how much you declared it for, and choose to pay you this figure instead of the agreed value that you actually did pay for it...be wise about it. Doon't go declaring ITR's for 5k.

As for lowering the purchase price... It is 'legal' in the sense if I buy an ITR for $5k that requires a LOT of work, I am still paying tax(GST) to have it repaired.

For instance, I paid $6K for a S14 200SX with a lot of problems plus the seller was really keen. Just Car saw the $180(3% stamp duty on purchase price) and they wanted me to bring in the car, after I repaired it to insure it for full agreed value(above market value)

The stamp duty thing is a grey area as far as legislation goes... However, I believe it is stated on the Transfer of Rego Form, the RTA reserves the right to charge a suitable stamp duty at their discretion(such as buying a Ferrari for $10K)