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[VIC] Buying encumbered vehicle

Discussion in 'The Pub' at netrider.net.au started by titus, Jul 6, 2009.

  1. So I'm buying a car, and the seller has been up-front with me about how he has a personal loan on it with a major bank. All okay so far. It's not your everyday kinda thing, so I can't just go and find another one, BTW.

    He told me I should get a bank cheque made out directly to the bank rather than himself, with which he will immediately pay off the remaining debt and free the car from encumbrance. This all sounds okay, but is there any way that I can get proof that the bank has relinquished its claim on the vehicle?

    Vicroads has a record of the encumbrance, which of course they cannot show to me, but they also tell me that it can be months before it is removed on their system (and sometimes never!), so they are of no use. I'm not overly concerned that there is anything untoward happening here, but it strikes me as odd that there doesn't seem to be a way I can immediately check that the claim has been cancelled.



    Anyone know the procedure, or a way around this?
     
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  2. Easiest way to ensure that it's paid out.
    Go with him to his bank. Get him to ask over the counter what the payout figure is - you can hear them say it - and then write a cheque for that amount.
    If you don't have a cheque book then ask about the payment options the accept.

    This way you at least know that the amount you're paying will cover the loan and that the payment is going to the bank.

    If it's not a large amount that you're paying may pay just to hand over the cash at the bank
    If it's more then what you're going to pay, walk away.
     
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  3. Hi, first bike I bought the owner had in under finance and that came up when I did the revs check. What I did was to get him to get a letter from the finance company stating what the payout figure was.

    I got a bank cheque made out to the finance company and the difference I gave to the owner. When I picked up the bike, we went together to the bank to deposit the cheque for the finance company and then stopped by the RTA to transfer ownership of the bike.

    Within a few days the he got a fax from the finance company stating that the loan had been payed out in full (which he forwarded to me) and within a week the revs cheque came up as no encumbrance.
     
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  4. Thanks guys. I think I will try and go with him to the bank, even though he has given me no reason to think he is playing dirty.
    I spoke (in general terms) to the bank and they indicated that there was no way they would provide ME with a statement about their interest in the vehicle, either before or after the sale, so if I am to get one it will have to be through him.
    If only Vicroads were able to guarantee their information is up to date, there would be no problem, but THEy claim they are at the mercy of what the lender chooses to tell them...
     
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  5. Just because you don't think he might be playing dirty, dosen't mean that you shouldnt be careful about entrusting huge sums of money with a complete stranger.
     
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  6. Yep, take the point, which is why I'm going to take him to the bank and sort it out. But I'm disappointed that there doesn't seem to be any system in place to protect me from the BANK, should they decide they still have a claim on the vehicle afterwards. Stranger things have happened.
     
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  7. The system is, you get a letter from the lender stating what the amount owing at a certain date is. You pay the lender this amount and any balance to the vendor.
    You then have proof the loan is paid out.
     
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