Selling a car under finance..

[Rocket36]

Majority of cars encumbered? WTF???? I seriously doubt that. Owing money on a car is ridiculous!

And I'm not talking about leasing here, I'm talking about getting into debt to aquire a depreciating asset. Seriously? WTF????

[elisiX]

Sorry, let me clarify. The majority of newer cars, lets say under 5 years old, would be encumbered in my opinion.

So I am not sure why something like this would surprise you so much - even if you personally dont believe in financing a vehicle.

[Speed]

The fact that this woman (sister? What are you, some american gangster rapper lost down under?) is from Punchbowl,

I took the sister comment literally, thinking that this person was a sister to one of the people buying the car.
I also thought that elisiX was telling the story from what he was experiencing. Sure he could have sugar coated it and been more diplomatic/politically correct but then we wouldn't have the full story and level of anxiety that elisiX was trying to express.

Manaz makes a good point that elisiX is selling an encumbered car and that he put himself in that position.

Rocket36 also makes a good point that it is not wise getting into debt to aquire a depreciating asset.
I personally have never financed the purchase or leasing of a car but what others do with their money is their business.

In my experience it has always been easier and more enjoyable buying a car than selling.

[elisiX]

Generally, yes I agree getting into debt to purchase a car is not a good idea.

However when we purchased the 07 SP23, I still had my 2006 Audi TT (which I owned approx 80% outright).

With 2 mortgages (both very positive), this was a suitable solution for us.

So any comments about it being stupid, not wise and so forth about financing a vehicle in my situation are not needed.

I'm not some 20yo who got himself $50k in the red to buy a car.

[G-rig]

You're lucky you've got anyone wanting to buy it. Nobody I know would ever buy an encumbered car. Far too much risk involved...

It's not that hard or risky, the buyer pays your finance company directly for the encumbered amount via funds transfer with the payout figure for that day. You get the tellers receipt with original stamp and usually if they pay for a fast transfer you can call up your finance provider and verify it's been paid.

Leasing isn't automatically better either. At the end of it you have a car with high km which would depreciate more anyway and you don't own it.

[gerhard]

Majority of cars encumbered? WTF???? I seriously doubt that. Owing money on a car is ridiculous!

And I'm not talking about leasing here, I'm talking about getting into debt to aquire a depreciating asset. Seriously? WTF????

Errmm, I suspect that 80-90% of all new car sales are encumbered, with a large portion of them being salary sacrifice leases.

In the OP's case, it appears that the finance owing was higher than the sale value of the car, hence creating significant extra difficulty with who owns what at a particular moment in the transfer chain of events.

When buying second hand, it's often far more comforting for the buyer if the car is encumbered, since title transfer will then be from a "trusted" source (the financier) rather than the (relatively) "untrusted" source of an individual owner.


I can't see any difference between getting into a lease and getting into debt - they are one and the same with a different label.

[Manaz]

Hold on a second mate - I never said I was from Neutral Bay - I said my Mrs works there.

This family are from Punchbowl/Roselands - I grew up in Beverly Hills - so get your facts right.

As for selling an encumbered car, I would hazard a guess that a vast majority of cars sold these days are encumbered.

Now I had planned on actually paying out the balance of the loan before selling the car but things moved quite quickly.

The buyers felt more confident in paying Esanda directly and as such, I honored thier preference.

The issue, if you have actually read what I wrote before mouthing off, is that they changed the arrangement at the last minute.

From the first discussion with them my preference was that the date of payment be the date of delivery.

They wanted otherwise but changed thier tune/minds at the last minute which left me no room to move - hence my frustration.

Dont talk to me about losing sympathy - I didnt come here looking for any. Rather to simply state my experiences for others.

And I never said you were from Neutral Bay - you perhaps need to read what I said.

And I also acknowledged that the buyer's making things more difficult than they have to.

What I disliked about your post was the the way you indicated that such behaviour wasn't acceptable in Neutral Bay - mate, it's not acceptable anywhere.

[Manaz]

As for this comment - I had a good 12-14 buyers lining up to buy it.

I just happened to make the deal with these guys first even though others offered higher amounts.

Please guys, dont make ridiculous comments without either knowing all the facts or thinking first.

That's 12-14 buyers who were willing to take quite a risk (were they all aware that the car showed as being under finance on a REVS check?) - the finance company with the money owed on the car are well within their rights to repossess the car to clear the debt if they so choose once it's been sold - what they generally do then is sell at auction or to a wholesaler, and you'd be lucky as the buyer of an encumbered car if they got more than what they owed on it and you got any of your money back.

[G-rig]

That's 12-14 buyers who were willing to take quite a risk (were they all aware that the car showed as being under finance on a REVS check?) - the finance company with the money owed on the car are well within their rights to repossess the car to clear the debt if they so choose once it's been sold

That's why if you're the buyer you pay out the persons finance company, you don't give them money to them. The buyer should also do a REVS check on the day of purchase.

There isn't much stopping people giving you a bad bank cheque (or taking the money out of the account straight after) when the car isn't encumbered anyway. At least a bank to bank transfer the money has left the buyers account and is 'held'.

[elisiX]

And I never said you were from Neutral Bay - you perhaps need to read what I said.

And I also acknowledged that the buyer's making things more difficult than they have to.

What I disliked about your post was the the way you indicated that such behaviour wasn't acceptable in Neutral Bay - mate, it's not acceptable anywhere.

Absolutely. It is not acceptable anywhere.

My point was that a family from that part of Sydney, of that particular pursuasion were yelling and fighting in arabic and english in the middle of a middle-upper class neighbourhood bank. ie; they stood out like someone in a santa suit at a funeral. I suppose you might then say that it should stand out no more in that area than in thier own area. Well I grew up around the area they come from and believe me, this is much more common place there than it would be on the northside (of which i've also lived).

That's 12-14 buyers who were willing to take quite a risk (were they all aware that the car showed as being under finance on a REVS check?) - the finance company with the money owed on the car are well within their rights to repossess the car to clear the debt if they so choose once it's been sold - what they generally do then is sell at auction or to a wholesaler, and you'd be lucky as the buyer of an encumbered car if they got more than what they owed on it and you got any of your money back.

I guess they were willing to take the risk. I told them all upfront of the finance outstanding on the vehicle and provided them the nessecary details to request a revs check.

Again, not quite sure why you guys are so upset about there being a vehicle out there with finance outstanding. It's very common.

And again, just in case its clear. It was my preference for the car to be handed over on the day the finance was paid out. Whether they paid it to me or Esanda was my first point of confusion in my original post. However once that was clear, I arranged to visit the bank with the buyer. The issue here simply lies with the buyer being rude, abrupt and basically changing the arrangement at the last minute. I am happy they decided to do things my way, which I asked for initially, but putting me on the spot by changing thier minds, in the middle of the bank when were there to make a simple transaction, with my car full of my **** is not acceptable.

Not acceptable anywhere.

[Rocket36]

Leasing isn't automatically better either. At the end of it you have a car with high km which would depreciate more anyway and you don't own it.

Why do you say you have a car with high km? Most salary sacrificed leases allow you to specify (estimate) the kms you're going to do and you pay FBT accordingly. And at the end of a lease you usually end up with options, like owning, trading up to a new model, paying a residual amount and selling privately for a profit. The point is, at no time do you have a whole lot of money tied up in a depreciating asset that you owe money on. You simply pay for the usage of it AND it's in your name. Peronally financing a loan and paying interest on a car is one of the worst things anyone can do. Second only to not paying off credit card debt in full in the interest free period.

Errmm, I suspect that 80-90% of all new car sales are encumbered, with a large portion of them being salary sacrifice leases.

Yeah... You read my whole post before sticking your foot in your mouth!

And I'm not talking about leasing here, I'm talking about getting into debt to aquire a depreciating asset. Seriously? WTF????

[G-rig]

Why do you say you have a car with high km? Most salary sacrificed leases allow you to specify (estimate) the kms you're going to do and you pay FBT accordingly. And at the end of a lease you usually end up with options, like owning, trading up to a new model, paying a residual amount and selling privately for a profit. The point is, at no time do you have a whole lot of money tied up in a depreciating asset that you owe money on. You simply pay for the usage of it AND it's in your name. Peronally financing a loan and paying interest on a car is one of the worst things anyone can do. Second only to not paying off credit card debt in full in the interest free period.

Everyones situation is different and best to calculate the numbers but the point is the FBT may be too high to work out economically if you don't do enough km (over 25,000km /year seems to be the minimum amount for tax benefits). I weighed it up and the repayments were only different by $200/month - so much for money not tied up in depreciating assets.

[Rocket36]

FBT benefits don't just hinge on km travelled. I had a lease with 15,000km a year and because the cost of the lease lowered my taxable income so considerably, my net position was still better even with a higher FBT amount.

[G-rig]

Yes, but i also found that the type of car and cost of it affects things.. would be better if you didn't have an expensive car and got a ute instead.

Fine if you're doing a lot of business km but don't see the point of spending heaps on fuel driving around for the sake of it like people do who at the end of the year doing interstate trips etc.

Anyway not sure what it's got to do with selling a car.

[kane]

Majority of cars encumbered? WTF???? I seriously doubt that. Owing money on a car is ridiculous!

And I'm not talking about leasing here, I'm talking about getting into debt to aquire a depreciating asset. Seriously? WTF????

yeah until tax time, makes it worth while in the right career.... negates alot of the interest paid, also some people may have better uses for their cash?

i choose to spend more and drive a nice car who cares about interest etc. imagine how bad going out to dinner, smoking, drinking, kids etertainment, electronics, and hobbies would look on a financial statement?

some people have different priorities.... the amount of people i see with ****ty "cash" bought cars who blow 200-300 p/w on drinking and pokies?