Buying an Encumbered Vehicle

[GTWHOA]

Hi

Just seeing what experieces people have had with buying encumbered vehicles. Is it best to write out the check to thier finance company or just trust them? how can I be sure it wont be repossessed?

Any ideas appreciated.

[JC]

Originally Posted by BFwagon

Hi

Just seeing what experieces people have had with buying encumbered vehicles. Is it best to write out the check to thier finance company or just trust them? how can I be sure it wont be repossessed?

Any ideas appreciated.

The ONLY option is to write the cheque out to their finance company. If you go any other way, and they don't pay off the debt, you inherit the debt, and you have no legal recourse at all.

[Casper]

Never, ever, under any circumstances would I buy an encumbered vehicle.

If you must then you would pay out their loan directly yourself and give them the difference (if any).

Remember, if you buy the car encumbered the loan is now your problem and you are responsible for it.

[GTWHOA]

gee you AU guys are fast! I might actually go with him and pay it myself that way I can be sure. Thanks

[Macca23]

http://www.fairtrading.nsw.gov.au/mo...ered%20vehicle

theres a link to the NSW fair trading site... it has what too do about Buying an Encumbered Vehicle. Much the same as ^^ posts

[asusdragon]

when i brought my BA it had money owning on, the bank who i got the loan for sorted it all out for me wrote two check one to the pay out the loan for the other guy and then one for the rest of the money to him, best way i see it as it then the banks problem if they stuff up, but if was you i would either get two check written out one for the the perosn you are buy and a check for the loan payout and go with him to make sure it is all sorted and get written confirmation of it being payout be bank, yourself and the seller signutares got to be worth something then

[Outbackjack]

When I sell a vehicle that has been owned by me via a novated lease it has a encumbrance held over it. I will only sell the car if I get one cheque made out to the finance company and one made out to me. If the buyer wont do this, then the sale is off. This is the only way a purchaser can be certain that they own the car out rite.

Do NOT give 100% of the buy price to the seller, no matter how well you know them. Insist on paying with two cheques. Last time I sold a car this way, I went to the bank with the buyer and he got two bank cheques. One to the finance CO and one to me. Then we went to the post office together and he watched me post the cheque off to the finance co. All above board and legal.

[Turbot]

I've sold a car that was under a loan. We called the finance co whilst the buyer was here and got a payout figure as it can change in 48hrs then got bpay details with both of us on speaker phone and then the buyer paid the owing finance via phone banking again on speaker phone so we could both hear the receipt numbers etc, done eaisly in 5min, both parties happy, but I would have also accepted cheque made out to the finace co.

[BA_Turbs]

When I sold my XR6T it was still under finance from the lease. Most companies that finance the buyer won't release funds to you directly anyway, only to the company who is owed the money and they will expect a letter saying once the cheque is in, the finance is cleared (ie - a payout figure). Its much easier and far more transparent to get the cheque made direct to the finance company. There's no real way to lie about it either (not that I'm suggesting anyone would!) 'cos any financial institution can check if a car is under finance simply by typing in a rego.

[SpoolMan]

How can one make 100% to find out that there is no money owing on a vehicle before it was purchased.
Clear title..

[Smoke Pursuit]

Do a Revs check...

All you need is the Vin and Rego, you can do them through the car sales website for $20...

I do them all the time for clients, people don’t seem to realise the importance of making sure there are no encumbrance on the vehicle.

Someone said you could be liable for the outstanding debt, this isn’t true, the simple fact of the matter is if a finance company has an encumbrance over it then they will just take the car, and you lose what you paid for it. This is the benefit of dealing with a dealer..

[asusdragon]

just ring up revs that want i did didnt cost a thing over the phone, print out cost you like $5 and then my finance company did another on and they charge me like $15 but better to be safe the sorry
only thing is revs only checks your state it is not a national thing yet so might wanna find out what other state the car has been in to check it hasnt been written off in another state or something like that

[Casper]

Originally Posted by LSTerritoryGhia

Someone said you could be liable for the outstanding debt, this isn’t true, the simple fact of the matter is if a finance company has an encumbrance over it then they will just take the car, and you lose what you paid for it. This is the benefit of dealing with a dealer..

Thats about as liable as it gets though. You get a choice... pay out the other persons loan or have your car taken from you and get stuck with nothing. Although you are not legally on the contract as the person liable the actual car is and you own the car. To me that means you take over the debt when you take over ownership of the car.

Its a matter of wording but the end result is that the car is held as security by the finance company... and you now own the car... so you now the security that they can take at any time.

I do agree about buying from a dealer though. By law they have to guarantee the car is free of debt and, if it turns out to be so, the dealer is responsible for covering it.

[schmidty]

And also, always get the print out after you do a vehicle security/revs check. Never take the verbal confirmation as being gospel.

A mates family bought a season old Case header. After they'd had it a few months the bank made moves to reposess it as it apparently was still under finance, just a lazy $875,000! The commonwealth bank had given them written confirmation that it had a clear title, so they fought it in court and the CBA had to cop the loss. So the person that originally owned the header sold the machine, with the debt and pocketed the entire sale amount. No doubt the bank would hae been bashing their door down trying to recover their loss.

[mowog]

If you selling in this situation go to the bank with the buyer and watch them get the bank cheques. If you arent taking the cheques at that time note the numbers.

I brought a car under finance a while back the owners authorised me to deal with their finance company. 1 cheque to the finance company via registered mail. 2nd cheque to the old owners.

[davocol]

I sold a car under finance, it's not that big a deal as long as you get a buyout figure from the finance company in writing or over the phone I called my finance company in front of the buyer, he dialled the number I gave the details etc. Did a bpay at the bank and I paid the shortfall or he could have paid me the difference whichever occurrs, all done in under 5 mins. Paying the car off before selling was not an option for me as I didnt have 20k lying around and I was not 100% sure the sale was through until the buyer produced the money.

[Melchior3]

I called my bank about selling my financed car and they basically said as above, 2 cheques (1 to them, 1 to me) or 1 cheque for the sale amount and they'll transfer difference into my normal account.

[irlewy86]

Mate of mine brought a car that was encumbered, wrote a check out to the finance company and one for the difference to the owner. Seems to be the only way to do it, I would be weary if somebody insisted I write the check out to them.