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Buying a bike still under finance

Discussion in 'General Motorcycling Discussion' at netrider.net.au started by synrgy, Apr 25, 2016.

  1. So I made an offer on a bike (private sale) 12k and they accepted. They told me beforehand it was still under finance. I've bought a car before under finance and I made out 2 bank cheques. 1 for the finance company for the amount owning on the loan and 1 for the seller for the balance of the amount. We both went to the finance company, I handed them the cheque and they produced a letter saying it was fully paid and they had no more interest in the car. Car was then signed over to me.

    This bike is a little different. After they accepted my offer of 12k and I said I'd make out 2 bank cheques, they tell me they owe more than 12k in finance on the bike.

    I'm not sure how anyone could get into this situation but it looks like the loan was refinanced to be extra parts for the bike. They fitted pipes and other bits totalling up to around 2k I'd say.

    I know most people are gonna say to stay well away but this is a good deal on a good bike.

    So what I think I need to do is get in contact with the finance company, find out exactly how much is owning. If it's say 15k seller will have to pay down the loan until the balance is 12k. They produce a letter saying balance is 12k. I give them the 12k bank cheque, they produce another letter saying the balance is paid and they no longer have an interest in the bike, seller hands over keys and signs over the rego papers to me right there.

    I'm in NSW/Australia. I'm hoping someone else in Australia has been through this before or someone works for a finance company and can tell me exactly what needs to be done.

    Finance is with Yamaha finance.

    I am paying cash money for the bike.
  2. Sounds like a lot of hassle and possible pain Id be buying one free of financial obligations especially if the seller says Oh BTW I owe more than the 12K
    • Agree Agree x 1
  3. Yes if you can be bothered.
  4. Thanks. I know it's a lot of hassle but the next bike on my list is 2k more stock standard. I'd be saving around 4K in cost and accessories.

    If it becomes too hard I'll just walk away.
  5. All you need here is the financier to agree that the sale price, whatever that ends up being will satisfy their interest in the bike. The financier may be happy to take your $12k, and let the current owner continue to pay off the small remaining sum, but being a motor finance company who probably had the deal arranged via a dealer instead of being a bank with whom the current owner may have a long standing relationship, I think that is 50/50 as to whether Yamaha Finance will play.

    The most important thing here regardless of how you rinse the deal, is to ensure whatever amount you pay, you get a letter from the financier stating their interest has ceased.
    • Like Like x 1
    • Informative Informative x 1
  6. Thanks that's good advice.
  7. From a car finance perspective, as thats what i know.

    Finance companies will generally provide a payout figure only to their client is point 1.

    Point 2 is that if there is a negative equity situation (owes more than market value) the financier will not release the security interest on the asset until they are completely paid out. This means you cannot transfer ownership.

    So if you are paying 12k and the payout is (say) 14k then the extra money needs to be paid to the financier in order for them to remove the security held on the registration.

    This quite often happens when an original purchaser adds accessories and finances them in as a part of the purchase price

  8. Yeah the seller is going to start the conversation with Yamaha finance. Pretty sure your last bit was exactly what happened here.
  9. Either way, unless they pay the difference between what's owed and the agreed sale price prior to you paying them anything, then can produce a figure for the payout in the amount which you have agreed to pay, be prepared to walk.

    It would suck to pay for a bike and then have it re-possessed because some other gumby hasn't done the right thing!