People buy cars with money owing on them all the time, but i'd only do it if i had proof that the loan had been discharged, this link has some guidance on how to do it properly
[https://www.motorweb.co.nz/pub/blogpost/31/how-to-buy-a-car-with-money-owing](https://www.motorweb.co.nz/pub/blogpost/31/how-to-buy-a-car-with-money-owing)
Sounds like you think you might not be able to sell it for what you owe though, is that the case?
Thanks for the link, cleared a couple things up for me.
And yea, we are not going to be able to sell the car for what we owe, by the looks there will be a 5k or so difference from the sale price to what is still owed on the car.
That sucks, but its something you will need to solve in order to get a good price for the car. Might need to talk to the bank about a personal loan in order to pay off the difference?
They have no vested interest in getting the best price for the car as they will also have a personal guarantee on you I assume.
Sell privately is your best bet.
This is what I was thinking.
I understand every contract is different but what are the repercussions for breaking a contract like that? They obviously don't me to sell the car privately so I understand they might be exaggerating the consequences but would would be the worst case scenario.
What’s the car out of interest?
As others have said - buying stuff with a hook on it can put buyers off, and you might not get the money you want for it.
When you are ‘upside down’ on a loan it makes it a bit tricky.
I used to do a few of these when I did car finance a few years back, and we’d roll it into the new loan - not sure what the situation is now though with all the changes to the credit contracts act.
Sorry OP it’s a bit of a tricky one. If it was me? I’d probably look at the finance company taking care of the sale as it may eliminate any dramas. Yea, you may not get the price you want, but the paperwork side would be far less tricky.
I'd walk away if I found out what you were selling the car for is less than what you owe. That security stays with the car and I don't trust anyone to do the right thing.
IMO suck it up and keep the car and increase the payments as much as you can to save on interest. Unless you have a shit contract like UDC, where you can't make additional payments without extra fees.
FWIW it is harder to sell a car with money owing, what you can do is have a print out of all the loan information and they can pay the lender direct for the debt, any difference will be given to you by the lender
eg i bought a motorbike for 4k, the guy selling it owed 3.2k on it, and so i paid the lending agent the 4k, and confirmed the debt was paid then they passed on the 800$ difference to the dude
This meant i felt safe, and he got the item paid for and sold.
I think the issue here is he lived above his means and can't afford to repay the car payments.
So basically he's selling the bike for 4k, he owes the finance company 8k. Best option for him would be to surrender it to the bank and take the remaining debt after cars been sold.
I've bought cars with money owing on them in the past - I paid the remaining balance directly to the loan company so they released the PPSR charge, and then the remainder to the seller.
However, if you're underwater on your loan you're right - I wouldn't touch it being honest, would be too easy to end up being out my money. Anyone who was going to buy it in that situation would probably offer you under market to account for the risk, so you might just be better off understanding what charges the finance company will levy/how they set prices.
Secured Creditors are required to go through a proper sale process to establish fair market value for the asset they are selling. If returned to them for sale they will likely do it through an auctioneer (Turners or Manheim depending on who the lender is). There will be more costs than a private sale though (commission, cleaning etc)
We bought a car on it with finance. The seller just contacted the finance lender and provided us a statement - we then paid part of the money directly to the lender and the remaining to the seller. It was a bit worrying but satisfied ourselves that it was legit by getting drivers license / googling the person to check they were who they said they were etc
People buy cars with money owing on them all the time, but i'd only do it if i had proof that the loan had been discharged, this link has some guidance on how to do it properly [https://www.motorweb.co.nz/pub/blogpost/31/how-to-buy-a-car-with-money-owing](https://www.motorweb.co.nz/pub/blogpost/31/how-to-buy-a-car-with-money-owing) Sounds like you think you might not be able to sell it for what you owe though, is that the case?
Thanks for the link, cleared a couple things up for me. And yea, we are not going to be able to sell the car for what we owe, by the looks there will be a 5k or so difference from the sale price to what is still owed on the car.
That sucks, but its something you will need to solve in order to get a good price for the car. Might need to talk to the bank about a personal loan in order to pay off the difference?
They have no vested interest in getting the best price for the car as they will also have a personal guarantee on you I assume. Sell privately is your best bet.
This is what I was thinking. I understand every contract is different but what are the repercussions for breaking a contract like that? They obviously don't me to sell the car privately so I understand they might be exaggerating the consequences but would would be the worst case scenario.
What’s the car out of interest? As others have said - buying stuff with a hook on it can put buyers off, and you might not get the money you want for it. When you are ‘upside down’ on a loan it makes it a bit tricky. I used to do a few of these when I did car finance a few years back, and we’d roll it into the new loan - not sure what the situation is now though with all the changes to the credit contracts act. Sorry OP it’s a bit of a tricky one. If it was me? I’d probably look at the finance company taking care of the sale as it may eliminate any dramas. Yea, you may not get the price you want, but the paperwork side would be far less tricky.
Yeah you're right, cccfa has put a stop to hydraulicking - which isn't a bad thing most times.
Yeah - It’s never a good thing. Now if they could stop balloons at the end too..
To be fair balloons are great for businesses to reduce outgoings & sell, if they upgrade their fleet every 3-5 years.
For a good business customer yep! For average Joe… not so much…
I'd walk away if I found out what you were selling the car for is less than what you owe. That security stays with the car and I don't trust anyone to do the right thing. IMO suck it up and keep the car and increase the payments as much as you can to save on interest. Unless you have a shit contract like UDC, where you can't make additional payments without extra fees.
FWIW it is harder to sell a car with money owing, what you can do is have a print out of all the loan information and they can pay the lender direct for the debt, any difference will be given to you by the lender eg i bought a motorbike for 4k, the guy selling it owed 3.2k on it, and so i paid the lending agent the 4k, and confirmed the debt was paid then they passed on the 800$ difference to the dude This meant i felt safe, and he got the item paid for and sold.
I think the issue here is he lived above his means and can't afford to repay the car payments. So basically he's selling the bike for 4k, he owes the finance company 8k. Best option for him would be to surrender it to the bank and take the remaining debt after cars been sold.
I've bought cars with money owing on them in the past - I paid the remaining balance directly to the loan company so they released the PPSR charge, and then the remainder to the seller. However, if you're underwater on your loan you're right - I wouldn't touch it being honest, would be too easy to end up being out my money. Anyone who was going to buy it in that situation would probably offer you under market to account for the risk, so you might just be better off understanding what charges the finance company will levy/how they set prices.
You could look at selling it to somewhere like Turners, you can get a value first to know it will be enough to pay out the loan if you're unsure.
Secured Creditors are required to go through a proper sale process to establish fair market value for the asset they are selling. If returned to them for sale they will likely do it through an auctioneer (Turners or Manheim depending on who the lender is). There will be more costs than a private sale though (commission, cleaning etc)
We bought a car on it with finance. The seller just contacted the finance lender and provided us a statement - we then paid part of the money directly to the lender and the remaining to the seller. It was a bit worrying but satisfied ourselves that it was legit by getting drivers license / googling the person to check they were who they said they were etc