Help: Buying a car that's on a lease...

[Vista]

Hey all,

I've agreed a price on a Golf from a private seller but have hit a speed bump with the deal.

The car is still under finance with GE and the seller has requested I make a bank draft out to GE and deposit it in my local Westpac. I feel there is insufficient security with this and was wondering what the normal procedure is with this kind of stuff.

Had hoped to pick up the car tonight, so any help would be awesome!

Cheers,
V

[Domel]

This could be helpful:

http://www.vwwatercooled.org.au/forums/f40/buying-car-finance-owing-64506.html

[djorkboy]

Is it on a lease of under finance?

The way I understand it is if it is leased it's not his to sell, it belongs to the leasing company. They usually won't allow the car to be sold unless the lease term has expired and the lessee has paid out the residual. Most people I have seen selling cars still under lease want someone to pay them a portion of the value of the car then take over the remainder of the payments in the lease term (I am guessing this would need approval from the lease company).

If it's under finance then maybe what he is asking you to do is legit and will protect you from problems later down the track, if you made out the cheque to him he could just pocket it and stop paying the finance company, who would eventually repossess the car from you.

If it were me I would not just deposit the money into GE's account, I would want the seller there with me to immediately hand over the keys/papers and I would want a copy of the receipt from GE stating that the finance on the vehicle is now 100% paid off. From memory of the last time I paid out the remainder of my car finance (it was with GE) they took 6 weeks to get me the paperwork to acknowledge payment-in-full but I don't think it usually takes that long.

[alex g]

Having just spent the week dealing with buying a car still under finance I can offer these tips.
Get a pay out letter from his financial group stating the amount owing.
Obviously you will need the letter to be to the agreed value which will state then that the interested party ( GE finance) will have no interest in the vehicle once payment has been made.
This payout letter will have details re eft transactions and vehicle specific details.
I wouldn't buy it until you have sighted such paperwork.
If you trust them enough you can pay what they ask and pray they pay the outstanding owing, but I doubt you do.

[woofy]

Yep you can buy a car under lease, I did it nearly 7 yrs ago now. You need the payout letter as described, that will ensure that they have permission to sell and you know whats owing on it. The tricky bit is if they owe more than what you are buying it for, in that case, they need to kick in the extra to get that payout letter down to what you are paying, or they pay you the difference directly.

In my case the dude owed less, so one cheque went to his finance, and he got to pocket a grand sum of about $100 from memory.

[Vista]

Thanks for the help guys.

He's sent me a copy of the letter from GE confirming the 'Account Finalisation (Payout)'. It's slightly more than the sale amount, so he's also sent me evidence of money transfers covering the difference. Now, all thats left is the sale amount.

I have a bank cheque made out for GE, not him, and he's agreed to sign the VicRoads transfer documentation and hand over all the bits and pieces once I give him the cheque. I've also drafted a contract of sale in the hope that this will provide extra security should this not work out. This should all happen this evening.

I'm excited, but certainly feel that theres a far better way to buy a car.

Thanks again, and fingers crossed!

[alex g]

Sound kosher , yer it's a royal pain.

[Stiggy_21]

what a pain

NOW... what golf is it???

[Vista]

It's tucked away in my garage for now. Whoever comes to the next Monday meet will see it.

Dead chuffed with it.

[Stiggy_21]

why do the meets have to be on monday!!! grrrrr

fine tell us all later

[Vista]

Fine. I'll tell you if you can't make it to Mondays.

2008 GTI MY09 United Grey 3dr DSG
Xenons, Sat Nav, Leather, Sunroof.

I'll start a thread when I take some pics. Car is awesome.

[Stiggy_21]

Awesome!!
So does that mean the mk2 gets shunted out o the way??

[Vista]

Unfortunately, I had no space for the Mk2 and it's gone to a good home, a fellow forum member. I hope he keeps involved in the community. I miss it a bit.

---------- Post added at 08:39 PM ---------- Previous post was at 04:32 PM ----------

Here she is.

[joshyd-mk2gti]

Noice. I've been looking at making the mk2 -> mk5 swap aswell. That spec is exactly what I would go for; UG, two door, leather. I might end up with an sti yet tho..