HELP...selling car on finance

[sontino]

My sister got a corsa 1.2 SXi twinport 2005 on a 54 plates about 2 years ago on finance courtesy of our mum. Think the car cost about £6500 before the interest on finance. I didnt really understand anything about car finance and had nothing to do with helping to choose a car but anyway the finance company used was the one offered by the garage and im sure they offered a ridiculous rate. Anyway now my mum is struggling a bit financially and cant afford to keep up payments on the car and neither can my sister, who is quite upset at the fact she is soon to be loosing her car.

My mum has paid around £4k so far on the car and has about the same left to pay. My mum has requested forms ot sign the car over to the company, however that would mean £4k down the pan, wouldnt it? I doubt the finance company would give 'change' from the sale of the car so to speak. I think the car is worth around £5250 at the moment. Is there anyway to sell the car though it is on finance, say for £5250 and pay off the £4K outstanding on finance and keep hold of the extra £1250 as somewhere to start when looking for a replacement car.

If anyone can give me any advice as i don't no much about settling finance, it would be much appreciated, feeling a bit sorry for my sis as she really likes her car. again PLEASE HELP, and thanks in advance.

 

[-Leigh-]

The car is not yours to sell.

 

[mullen]

suppose it its getting paid off then yeah but as long as the new owner has proof of the car being clear of any outstanding finance then I don't see the problem?

 

[lewisniven]

spose you could sell it, and get the buyer to pay the finance off, so they know its done, then pay you the £1250 or whatever it was.

 

[Jay_clio]

why dont yo just sell the car, aand tell the finance you want to finish off the payment, they say how much you need to pay, and Pay shouldnt be to hard,

 

[JPandDeb]

Why not take out a personal loan and cover the cost and then sell the car?

 

[Bluebeard]

It is illegal to sell a car that has outstanding finance, as the car belongs to the finance company until you've paid every last penny back to them.

Only one way round it (legally)
So if you sell the car, the buyer must pay the balance owed to the finance company BEFORE the logbook gets changed, once the finance company have accepted payment and cleared the car on HPi register,the car then belongs to the buyer. The seller must either pay the difference to the buyer (negative equity) or the buyer must pay the difference to the seller (positive equity)

Only way round it.

 

[JoelDee]

^

 

[Ben.]

^^and that will put alot of people off buying the car i would have thought?

could you take out a small loan to pay of the finance, then sell the car to pay off the loan?

 

[Josh220]

yeah i'd of thought getting a personal loan to cover the finance would be the best option, you can clear the finance and will be paying a much better rate plus if you wish you can then sell the car which won't have any finance against it and clear the loan too

 

[sontino]

^^and that will put alot of people off buying the car i would have thought?

could you take out a small loan to pay of the finance, then sell the car to pay off the loan?

^^ ye im sure it wud put alot of people off buying the car, this way is legal isnt it?? I'm thinking this would be the best bet.

Am i write in htinking the post office offer the best rates for personal loans??

Does anyone else think this is the best option.

 

[Bluebeard]

Personal loan is by far the best option!!

 

[sontino]

rite, thanks for all the advice then guys, any1 know best personal loan company. post office??

 

[Duncx]

http://www.moneysupermarket.com/loans/

 

[-spook-]

if she wants 2 keep the car why don't u get a good personel loan & keep the car, the payments would be cheaper if u put it over 4 years or somthink

 

[sontino]

thanks for that, that is coinsidently exactly what i am trying. Though she is 20 so cant get some of the better rates for 21 and above. thanks tho

 

[weewebbo]

I've bought 2 cars with outstanding finance, including my current car. Its really rather simple. The finance is on the car not the person. If you sell the car then the finance goes with it and the new owner is liable.

Obtain a settlement figure from the finance company for the money owed on the vehicle, say its 4k. Say you sell the car for 5k. The buyer can send a cheque or make a bank transfer direct to the finance company for the outstanding finance (4k) on the vehicle and thus clearing the finance. This can be done with phone banking as well, as I have done it direct with a finance company. You then keep the balance of the cash from the sale and the car goes to the new owner with no outstanding finance.

Easy peesing lemon squeezy.

 

[_Kenny_]

^ exactly what I did with the Civic! Takes a wee bit longer but not a major issue

 

[chris c]

Be careful if you're thinking of taking a loan to clear the finance and take advantage of a lower rate.

You need to check how much interest you have left to pay as some finance companies 'front load' the interest. This means your first few payments cover the interest and the rest of your payments clear the balance.

Therefore, at this stage you are effectively paying the balance interest free as all the interest has already been paid. Switching to a lower rate will actually cost you more in this instance.

 

[Da]

I've bought 2 cars with outstanding finance, including my current car. Its really rather simple. The finance is on the car not the person. If you sell the car then the finance goes with it and the new owner is liable.

Obtain a settlement figure from the finance company for the money owed on the vehicle, say its 4k. Say you sell the car for 5k. The buyer can send a cheque or make a bank transfer direct to the finance company for the outstanding finance (4k) on the vehicle and thus clearing the finance. This can be done with phone banking as well, as I have done it direct with a finance company. You then keep the balance of the cash from the sale and the car goes to the new owner with no outstanding finance.

Easy peesing lemon squeezy.

What I did! Except it only works if you owe less than the car's value! Many people can get stuck in a negative equity scenario meaning this option isn't available.

*edit *Dan covered that

 

[sontino]

thanks for the advice guys, i understand it is possible but how much of a put off to potential buyers is it?? How would you advertise the car if it is still on finance or would it be best to simply mention it whilst viewing. People not used to buying cars would perhaps be put off wouldnt they?

 

[Ben.]

personally i find buying a car quite alot of hassle anyway, and i would be completely put off of buying a car with outstanding finance, unless somebdy sat me down and explained in detail how it would work!

you may have to put it in the advert though, as many people do hpi checks and would find out anyway!

 

[cat171]

I wouldn't buy a car with outstanding finance on it at all (it's not theirs to sell anyway)
Personally I think that your best off getting out a loan (with a low rate of something like 5.6%) Pay the finance off & then sell the car.

 

[Chili Red]

Yep, that's what I'd do. Wouldn't dream of buying a car which wasn't HPI clear.

 

[Da]

Personally I think that your best off getting out a loan (with a low rate of something like 5.6%) Pay the finance off & then sell the car.

That's all well and good, in an ideal world! In the reality known as life, not everyone will have that option available to them.

 

[Ad]

I did what others say when I purchased the civic. He owed 4k on it, I paid him the balance in cash and wrote a check to the finance company.

If you want the buyer to pay off the finance, have a letter confirming the balance, I wouldnt have done it without proper documentation thats for sure!

 

[theduck]

Personally I think that your best off getting out a loan (with a low rate of something like 5.6%) Pay the finance off & then sell the car.

and how about those people who have strecthed themselves to buy that car and so wouldnt get approved for further borrowing? Let alone at a low rate. Out of curiosity who is offering loans at 5.6%?

 

[richlawson]

It is illegal to sell a car that has outstanding finance, as the car belongs to the finance company until you've paid every last penny back to them.

Only one way round it (legally)
So if you sell the car, the buyer must pay the balance owed to the finance company BEFORE the logbook gets changed, once the finance company have accepted payment and cleared the car on HPi register,the car then belongs to the buyer. The seller must either pay the difference to the buyer (negative equity) or the buyer must pay the difference to the seller (positive equity)

Only way round it.

100 percent right

get the buyer to make payment to the car loan company and the diff to urself

 

[Iain C]

just an idea but can you pay off the remaing finance on a credit card?
That way you can have 0% apr over a year with some cards.
Your sis can keep the car and review finances in 10 months time.
Failing that tell your sis to get a 2nd job too keep her car.
I worked at 3 jobs to pay off my cup a few years ago