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want to buy, but it has finance on it

Discussion in 'General Motorcycling Discussion' at netrider.net.au started by cheston3, Jan 22, 2008.

  1. hey,

    currently i have this offer from private owner, the bike is great, i want to get it. but he has finance on it. how am i suppose to go on with the deal to ensure that i am not being scammed?? should i give him the full amount?? should i write down a contract that no finance is supposing to come after me cause i pay certain amount to him?? cause he said that he will solve the finance once he gets the money. i am really afraid that i cant do the registration and pay off in full while still having finance company chasing after me. so how can i protect myself??? enlighten me.. anyone..?? thank you..

    bike got stolen poor kid
  2. You, with him need to get the pay-out figure from the finance company. If the ask price is greater than the balance. A payment of that amount is made to the finance company, with the balance going to the owner. Make sure you get fax or letter copies of this evidence.
    If the balance is greater than the ask price, he cannot sell the bike until that amount has been paid back to the finance company.

    Once done, ask for a copy, fax or letter from the finance company that declares the bike free from obligation.

  3. Spot on.

    YOU pay the finance company do NOT give it to him.
  4. I'd walk away.

    Too much potential for hassle.
  5. I agree with ^. It could end in tears.

    There will be other bikes.
  6. Really? Surely this situation is pretty common... If it is really a 'walk away' situation then I guess it's something that needs to be taken into consideration when buying a bike with finance...
  7. It might not be a problem for most people. I just like my deals simple, and forty years without getting seriously burned suggests that it's a workable philosophy.

    Not the only one of course. Just a useable one.
  8. There's 2 scenarios and procedures:

    1) The price you've agreed on for the motorcycle is MORE than the finance that is owing.
    - you request the payout figure, pay that amount to the finance company to clear the debt yourself, and then pay the difference to the owner.

    2) The price agreed on does NOT cover the payout figure: so the owner needs extra cash anyway to pay it off.
    - they get a loan to cover the whole amount or do what they've got to do to make the payout equal what you're paying for the bike: then proceed with procedure 1.
    - OR they want the cash to be paid to them with the promise they'll then sort out the finance [this is where you tell them "No. That's not acceptable"].
  9. Just remember that its the finance company that owns the vehicle (well they really only own the unpaid for portion), so any money given to anyone else is useless you might as well give it to me :grin: . pro-pilot has got it spot-on, contact the finance company as they own it (until its paid off). Or just find out how much is oweing and pay the seller the difference in asking price and then you pay the finance company (they dont care who gives them money (just like me))
  10. BTW When I sold my Hilux, it had finance owing on it.

    I got an unsecured personal loan from the bank. Paid off the vehicle. Got the certificate of full ownership from the finance company, and then when I sold it for cash - paid the loan back immediately.

    The loan app fee was negligible and the vehicle sold before I needed to pay any interest on a repayment [which I would have had to pay to the finance company anyway, if I hadn't paid it out].

    It made it easier to sell the vehicle, and I had no problems doing all that so someone else could buy it with peace of mind.

    Anyone unwilling to do the same, can be classified as a d1ck.

    But if they can't get a new loan or whatever, then maybe there's extenuating circumstances you need to work around in order to get the bike - in which case, see my previous post.
  11. Of course it is. PatB is just being paranoid.

    These types of transactions occur every day. It they were so fraught with danger, you would have seen something done about it by now.

    As others have said, contact the finance company, get the payout figure and who to make the cheque out to. And the buyer posts off the cheque, not the guy who is selling the bike. The balance, if any, goes to the seller.

    And if the OP is unsure go to his state's consumer affairs website for more information.
  12. Of course I am. They're all out to get me :LOL: .
  13. how do i get the details of the finance company? ask from him or can i check through vicroads?? i fully understand what you are driving and i think is good reply.. thank you..
  14. First, get the Finance company name - either from the seller or pay VicRoads for it (???)
    Ring the Finance company - you'll need reg no and current owners name - and explain you want to buy the bike. They will be quite helpful. Confirm finance exists - they wont give you a payout figure or any other info.
    Ask Finance company for bank, account num and ref num details for you to make a direct deposit to. Have them Fax that direct to you so you have a copy of their letterhead for comparative purposes. Have a bank cheque drawn made out to the finance company - no cash, no personal cheques (provides a chain of evidence if necessary).

    Ask the seller for a faxed letter from the finance company stating the payout figure applicable to date.

    Take youself, the seller, the bike (you hold the keys), to the bank - if you are paying less than the payout figure ensure the seller pays the extra first (cash or bank cheque - no personal cheques), then you pay the rest, else you pay the payout figure direct and the balance to the seller. Get copies of deposit slips and ask seller for receipt.

    Tell the seller that you want a "Clearance Certificate" from the finance company when the funds have been processed.

    You take the bike,
    and breath easy only when the clearance certificate arrives.

    This was how I handled a similar purchase recently, only difference being that when the seller saw what his payout figure really was he decided he couldn't afford to sell the bike!! :evil: And when he told me how much they bumped him for I wasn't surprised at his descision!!

    Its not as clean and easy as an unencumbered purchase, but it is reasonably common. If you be careful everything should work out fine.
  15. oops - double post
  16. What if the bank is in another city, say Sydney and you're in Victoria, or indeed, the bank is nowhere where you live. ie. most finance companies.

    Or, if the bike is under Yamaha Finance or Honda or whatever, where do you go to do this?

    When I sold my last 3 cars which were all under finance (novated lease), all I did was to get the payout figure and to whom the cheque(s) should be made. The purchasers, who were getting loans for the cars, made their own separate inquiries and their banks asked for specific conditions.

    They came to my place, cheques in hand. We filled out the transfer of rego forms, signed a contract of sale that I'd written up, each of us getting a copy, and that was it.

    Never heard from them again.
  17. Its all very simple. As already mentioned, just sit down with the seller. Call the provider and get a payout figure.
    With that (assuming the pay-out cost is less than the ask price of the bike). Make a check out to the provider, and if so, balance to the seller.

    You should get a reciept from the provider for the payment, along with a letter that states that the vehicle is free from encumbrance.
  18. Most finance companies have associated bank accounts with one or more of the main banks. In my example the finance company was a Sydney based extension of Honda Finance - they have branches/accounts with local banks most places, I had lots to choose from in Melbourne. Not really an issue.

    I'm glad your transactions went smoothly, I'm sure most would. I wish that all sellers were honest in their transactions.

    But as a buyer, I chose the approach as I described to ensure the least risk for me. This approach was advised to me by someone who had previously been burnt in a similar transaction and in addition to paying the seller also ended up having to payout the finance company or loose the bike because the seller did the dirty and kept the money

    I have not sold anything financed (except properties) so would rely on your, and others, experience/advice to help develop an approach that would work best for me if selling.
  19. Or you could walk away and find an unencumbered bike or buy from a dealer, hand over your cash and be away free and clear :grin: .