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How do you buy a 2nd hand bike with finance on it?

Discussion in 'Politics, Laws, Government & Insurance' started by Tiga, Sep 20, 2006.

  1. If you were considering buying a second hand bike that already has a loan applying to it, then what is the process?

    Do you need to make out a check to the finance company and a check to the owner? How do you know how much should be paid to the finance company?

    If anyone has done this and can provide advice it would be much appreciated.

  2. The person paying off the loan must discharge the loan, and you must get a REVs check to cover your own ass. DO NOT EVER pay off the loan with your personal money, you are wide open to fraud.
    The person with the loan has to do all the work.
    If they won't see it this way, walk away from teh deal.

    Regards, Andrew.
  3. I am of the opinion that buying a vehicle under finance is a complete no. It opens you up to all sorts of risks. If the previous owner will not clear the debt before sale then I just walk away.
  4. Hi Katherine, I bought a car (with money owing) a few years ago.
    The seller arranged for the bank to fax me a payout figure (on bank on letterhead) I paid the bank what was owed over the counter and paid the remainder to the seller.

    All pretty painless when we did it, we finished up with the car, 2 signed receipts and the letter from the bank to say it was all paid out.
  5. Tiga I was in this situation with my car. Basically what we did was I got a letter from the financier stating the total amount owing. The buyer made out a bank cheque to the financier for that amount and the remainder in a seperate bank cheque to me.
    That way both parties are covered.

  6. Lucky! He could have easily kept legal posession of the car, and the remainder of your money, leaving you to pursue him on heresay without a binding contract!
    It's just not worth the risk. Why trust a complete stranger with your money?

    Regards, Andrew.
  7. You can do a revs search and purchase a certificate. This can be done at https://online.revs.nsw.gov.au/revs/public.htm

    Suss out with the owner if he/she will release the bike once a Bank Cheque (cleared funds) is presented to the finance company to clear the encumbrance over the bike. If they wont release the bike I'd walk away from the deal, I don’t want to hand over my money and not collect the bike at the same time.

    To find out how much still owing on the loan the vendor must supply a Payout letter that will have the payout figure and an expiry date and when the payout figure will be valid till.

    Never give cash to the vendor to payout the loan, it may not happen and the finance company will still have their interest over the bike.

    I’ve purchased two bikes in the past that were both under finance and I had no trouble buying them at all.
  8. Not luck Andrew, good planning.... The seller came to the bank with me, I drove what was to be my car and after I paid the bank, I paid the seller and drove them home.
  9. Most times you won't have problems doing this, as most people will do the right thing.

    It is still something to be avoided if possible however as you are exposing yourself to a risk.

    If the bike is uncommon or rare then you may have to do this, but if it's a common ordinary bike then I see no reason to take the extra risk.
  10. I did a simliar thing to this with buying my bike. I made the seller sign an agreement with me to the conditions of the sale with non-biased witnesses where he agreed to the following; to organise finance company payout figure on their letterhead sent to me while i conducted a revs check to confirm thereafter when payment was placed with finance company he would organise confirmation from finance company on their letterhead that loan was paid out and closed with another revs check conducted afterwards to again confirm. If all went well then sale could be finalised. Once this was done I then paid the remainder of the $ to the seller who then signed another agreement with witnesses that purchase has been completed and all relevant paperwork was signed off on and handed over to buyer namely me.

    Thing to remember - no matter how careful you are it could always go wrong. Lucky the seller was a friend of a friend so I felt I could trust the dude and I got a sweet bike out of it!
  11. The seller is selling their bike to probably pay off the loan. This must happen a bazillion times a year... so there has to be a safe and risk free way forward. I mean, how many houses are sold free of a mortgage?!?!?! Why would a bike be different? Can't see why it must be a complete no no.

    Prolly makes sense to be talking directly to the finance company rather than relying on the paperwork the seller provides...

    Regarding Revs, it will confirm that the bike is under finance and the parties involved.

    Good luck with it Tiga.


  12. I have been in this situation before aswell. and i have also had a car reposessed due to a past encumberance. I try to stay as far away from any vehicle owing money on it, and the only way to protect yourself is to get a loan for the vehicle through a bank and they sort it all out for you, this is the same for a house(but they charge you a lot for it!!)
  13. This is the reason I took out an unsecured personal loan rather then finance on the bike. When it comes to selling it and the new buyer does a check they'll see nothing is owed on the bike.

    I would have been slightly better off ($3 a week) with finance but I thought to make my life simple I'd take the personal loan.
  14. i think it is safe to say that there is a geater risk of purchasing a bike with money owing on it than one without (nobrainer)
    it also looks evident that many have done so with no problems.

    me? i WOULD buy a bike with money owing in the right circumstances and for the right price. but i would do my very best to cover my ar5e should any funny business occur.
    lets not lose sight of the fact that any second hand purchase is a risk in itself.