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Buying a bike that is already Encumbered / financed

Discussion in 'Politics, Laws, Government & Insurance' started by gregbull, Apr 1, 2010.

  1. Hi All

    Im looking at buying this zzr250 that has been in an accident pretty cheap.

    The main issue is that the owner still has a loan for about $6000 that he is still paying off and the bike is listed as Encumbered by Vicroads. (He cant afford to pay it off even if he sells me the bike).

    Obviously if I buy the bike, and fix it up and re-register it, and he defaults then it could be repossessed.

    My question is if I was to use the bike as parts, and say get another zzr250 for parts and rebuild a bike from both, what issues could I face then from the financier? When is it no longer their bike? Would I need to make sure that the bike I built had a different vin then the financed one?

    Or is this all too hard & complex?


  2. If the original owner defaults, the finance company could still sue you or take you to administrative appeals tribunal, since you have discharged the vehicle they have a security interest in and thus at the time of discharge were required to pay them what was owing.
  3. Correct
  4. Yep all way too hard! If it was under finance it should also have had full comp Insurance so not sure why it would not be have been 'paid out'. Perhaps the insurance was not renewed or not paid out for some other reason? Definitely in the too hard basket!

    I have bought a bike that had a substantial amount owing, I simply paid the financier their amount owing and the balance (about $120!) to the seller. I got the bike for a bargain, he got rid of a debt and we were all happy. It had no damage and was registered though. Simple enough to do under those circumstances but not under the ones you describe.
  5. Yeah **** it, if the bike is encumbered more than what you are paying for it, then it's a no go. Usually you would deduct what is owed on the bike from what you were going to pay him, and then pay that amount directly to the finance company yourself as to make DAMN sure that it was taken care of.

    So if you're buying it for less than that, it still leaves you vulnerable.
    Steer well clear.
  6. Don't touch it.
    The finance company actually "own" title to the bike until it's paid out fully.
    They could just walk in and take it if you default.
    You also will NOT get a car / bike loan unless your bank is satisfied that the bike will be sold to you unencumbered (paid out).
  7. Yep even if the bike doesn't technically exist anymore, then you still owe the money.

    I helped a friend by an encumbered bike once. We went with the bloke to the bank and handed over the money to the bank. he go the change. Witnessed all the paperwork being signed and took the bike.

    If you are not paying $6K or more, make sure he has the money on the day to finalise the loan. Otherwise he may be able to redraw after you have left with the bike, or at least just never pay the bit he owes

    Without an asset, the temptation to not pay a debt is just too high for many.
  8. Too much hassle. Forget about it and find another bike that isn't encumbered
  9. OK, thanks for advice all.

    I am thinking of the option where i buy it for parts, and use most parts, except where the vin is, ie steering head (anywhere else?).

    Does anybody know what older models of the zzr steering head would fit a 2009 model?

  10. if you are going to buy it - buy it direct from the finance company and get all the paperwork from them stating you have purchased it outright from them and that they no longer have any title over the bike

    Basically the finance company owns the bike
  11. Did you miss the posts above where everyone said not to touch it unless the price you were paying was more than the amount owed to the finance company, and you paid the money directly to the finance company?

    DO NOT TOUCH THIS BIKE, not even for parts, unless the debt can be completely cleared before you take delivery. Whether he pays it or you do, make sure you have paperwork showing that the debt is cleared.
  12. Rod, some people ask questions and don't want the advice.
  13. True enough Cejay. But sometimes it still beggars belief.
  14. Do not touch it !!!!!
  15. What he said. ^
  16. Sounds like a bargain, if he's got another one let me know.
  17. WTF? Didnt you read the advice above.
    This is no bargain.](*,)
  18. Are you also in the market for a nice bridge?
  19. It just gets worse! So now you are thinking of buying a bike that belongs to a Finance Company and changing the identity of the bike to something else so that it doesn't go to its rightful owner? Seriously if you want a ZZR that badly, look on the various bike sales websites for an honest and 'legal' bargain that someone no longer rides!
  20. What.. the Cat?