Buying a car with money owing

last fairlane · 02-05-2016, 01:58 PM

Hi all long time member here last week I bought an XH ute with out rego
theres nothing wrong with the car
but the seller tells me he took out a loan a couple of years back and he used the ute as collateral
I checked with REVs and it came back as having encumberance
he told me I could register it in my name but shouldnt sell it to a stranger
as he is buying a house he is not going to default
can I register it in my name with the money still owing
if I wreck it out I still cant sell the body or motor so that doesnt leave much
thanks just wondering where I stand
Thanks John in Brisbane

Peter B - CV8 · 02-05-2016, 02:00 PM

Has he paid the loan off ?? If not, you could find yourself losing the car if he defaults on the repayments..

**Silver Ghia** · 02-05-2016, 02:05 PM

Walk away unless you actually see the encumbrance deleted from the REVS.

Smoke Pursuit · 02-05-2016, 02:06 PM

Don't touch it till it's clear title.

LG17 · 02-05-2016, 02:33 PM

Unfortunately it's the fastest way to lose both your money and the ute.

It's probably too late now but I would have taken a cheque made out to whoever he owes the money to and gone with him to make the payment, then paid him the rest.

mechanic · 02-05-2016, 03:02 PM

Run for the hills as fast as you can.

Falcojimmy · 02-05-2016, 04:06 PM

Heard of this happening many times. Never ends well. Great way for a crook to hand their debt on to you.

Itsme · 02-05-2016, 04:17 PM

Quote:

Originally Posted by Falcojimmy

Heard of this happening many times. Never ends well. Great way for a crook to hand their debt on to you.

You don't inherit someones debt you just run the risk of losing the car being repossessed if that person defaults on their loan.

cram_it_frog · 02-05-2016, 04:55 PM

I bought an XH ute with out rego
theres nothing wrong with the car

this is a serious mistake by many people and most people end up loosing every thing cash you paid and the car and there is no legal help

I do not think you can even transfer the car into your name and if you sell any parts you may even be charged with theft because you have no legal title to the car

there is two ways to get out of this get your money back or he pays for the loan till then there is nothing you can do

I have seen cases where a person did the same and spent a ton of money new radio and engine work ect and lost the lot they just pulled up put his car onto a truck and towed it away and he was told if he tried to stop them they will ring the police and have him arrested

Yellow_Festiva · 02-05-2016, 05:13 PM

Go back to the sellers house pronto and get talking. You need to call the finance company then and there and get a payout figure.

You then need to get that figure back off the seller and together go to a bank and deposit it into the account of the finance company so you both know the loan is paid off.

If there is more money oweing than you paid the seller needs to fork out the rest.

If they don't come to the party you may have done your dough as well as your ute.

Don't accept verbal promises when dealing with debt - especially when it's you that will end up losing out.

nstg8a · 02-05-2016, 05:19 PM

A mate of mine had this happen, he wrecked the vehicle and actually made reasonable coin then let the finance company find out the previous seller had disposed of it. They didn't even bother repo'ing the shell.
Seller got in a world of hurt legally. My mate got a stern talking to from the cops about not doing a ppsr first.

stig_3754 · 02-05-2016, 05:20 PM

All good advice here. As someone who has previously sold a car that was still under finance at the time, I was upfront to the buyer from day one, and I organised the payout figure. The buyer paid what they offered to the finance company, and I paid the rest, sending each other our receipts to show that it was all legit. Unless the seller does this for you, walk away!

nstg8a · 02-05-2016, 05:23 PM

Quote:

Originally Posted by stig_3754

All good advice here. As someone who has previously sold a car that was still under finance at the time, I was upfront to the buyer from day one, and I organised the payout figure. The buyer paid what they offered to the finance company, and I paid the rest, sending each other our receipts to show that it was all legit. Unless the seller does this for you, walk away!

This is the only way I'd do it.

Yellow_Festiva · 02-05-2016, 05:24 PM

He can't 'walk away' or 'run to the hills'. I read it as it being a done deal. Guy needs to know what to do now that the transaction has finalised.

Express · 02-05-2016, 05:36 PM

Am I right in understanding the car is part collateral for a home loan?

If it’s a home loan it could be a long time before it’s finalised unless the financer releases it to you?

I guess the real question is, are you locked into the sale with no way to back out?

xisled · 02-05-2016, 05:46 PM

A couple of things to be made aware, if he used the car as collateral and there is finance on the car hey may be in default of the loan due to the car not being registered and no
Comprehensive insurance on the car.

You may need to do more reaserch but most secured loans will have a clause that the car will need to be comprehensively insured and registered, if this does it happen then the loan may be defaults if the finance company do a check. The finance company may come after the car as the loan contract has been broken.

Also buying a house means nothing as he may stop Paying the loan and it may take a year or more for any marks to be put against his name and that's only if they put mark is against his name.

xisled · 02-05-2016, 05:49 PM

Quote:

Originally Posted by Express

Am I right in understanding the car is part collateral for a home loan?

If it’s a home loan it could be a long time before it’s finalised unless the financer releases it to you?

I guess the real question is, are you locked into the sale with no way to back out?

I read it as the seller is buying the house so he won't default because he is buying he house. Needs good history to get the loan.

Yellow_Festiva · 02-05-2016, 05:54 PM

Quote:

Originally Posted by Express

Am I right in understanding the car is part collateral for a home loan?

If it’s a home loan it could be a long time before it’s finalised unless the financer releases it to you?

I guess the real question is, are you locked into the sale with no way to back out?

I think the seller is trying to say that he will pay out the loan as he doesn't want a bad credit on file when he goes to apply for credit for a house.

Beat me to it xisled.

falconhell74 · 02-05-2016, 06:39 PM

Tell him to give you your money back or pay out the loan and give you a copy of the recept.
Otherwise as above you have no grounds to stand on , not sure but I think it may be illegal to sell anything that is encumbered

Adamz Ghia · 02-05-2016, 07:00 PM

Why wouldn't he just have them lift the encumbrance? Depending on how much he owes they will do this if he has good history. Being an XH I doubt we're talking big dollars.

As I understand it you've already handed the money over and have the ute in your possession?

danzvtil · 02-05-2016, 08:03 PM

I would take it back to the original owners house and block in his driveway. I would give him 2 choices, 1-to give you your money back in full and return the car to him or 2-You accompany him to his finance institution where he pays out the loan and gets a letter from them saying they no longer have an interest in the car.
His word means squat, once the car is out of mind, is likely he will conveniently forget to make payments on it.

**TUF_302** · 02-05-2016, 08:20 PM

Something seems odd about this, its not like its a big dollar car

mike_nofx · 03-05-2016, 09:00 AM

Quote:

Originally Posted by TUF_302

Something seems odd about this, its not like its a big dollar car

This is what I was thinking.

Who would even accept an XH Ute as collateral for anything? Unless this Home loan was taken out back when the XH was relatively new.

I think if you went to a bank today with your XH as collateral they'd laugh at you

katefactor · 03-05-2016, 09:37 AM

Are you sure it's not stolen and the collateral thing is just a smoke screen. Seem real suss to me

XB GS 351 Coupe · 03-05-2016, 10:18 AM

Quote:

Originally Posted by Yellow_Festiva

Go back to the sellers house pronto and get talking. You need to call the finance company then and there and get a payout figure.

You then need to get that figure back off the seller and together go to a bank and deposit it into the account of the finance company so you both know the loan is paid off.

If there is more money oweing than you paid the seller needs to fork out the rest.

If they don't come to the party you may have done your dough as well as your ute.

Don't accept verbal promises when dealing with debt - especially when it's you that will end up losing out.

This is probably the best course of action left if you have already bought the car for what ever reason.

However odds on Seller is going tell you to get ******, and there is a more than good chance you have done your money and if he defaults on his debt someone will be around to collect the ute.

By the way he is not legally allowed to sell the ute as it is security for a loan, but unfortunately that is between the finance company and him. If the finance company find out he no longer has the car they will look for the car and collect it with a repossession company, and they will go through great lengths to do this, to the point of private detectives and persons rocking up at your work or home at add hours to 'steal' the car, which they are legally allowed to do. If you try and stop them they will probably have you arrested and charged.

DOC · 03-05-2016, 11:02 AM

Quote:

Originally Posted by last fairlane

last week I bought an XH ute with out rego

but the seller tells me he took out a loan a couple of years back and he used the ute as collateral. I checked with REVs and it came back as having encumberance.

he told me I could register it in my name but shouldnt sell it to a stranger
as he is buying a house he is not going to default.

? The question is Why ? even bother in the first place, so many red flags.

Yellow_Festiva · 03-05-2016, 02:33 PM

Quote:

Originally Posted by katefactor

Are you sure it's not stolen and the collateral thing is just a smoke screen. Seem real suss to me

Would the REVS check also show it as stolen??? I guess that would depend on what agency is providing the info.

Big_Daz · 03-05-2016, 02:42 PM

My FG had money owing on it when I Sold it... What worked for me was being completely transparent with the buyer. When it came time to pay me, as he used cash, we went into the Bank it was encumbered with (Esanda/ANZ) and he paid the owing amount to them direct and got a printout/etc and gave the remainder to me in cash.

Esanda then emailed me through a letter stating they had no further interest in the vehicle which I sent through to him.... It all worked well and we where both happy...

On the flip side, one of my (now ex) mates sold his Ford Focus to a girl as he was moving to London. Said he would pay it out but never did... Basically buggered of to the UK and ****ed the money away... Stopped paying for the car and the poor girl who bought it got it repossessed... She was going to after him when he moved back but he filed for bankruptcy or something to apparently get out of it...

OP better hope old mate doesn't default...

Trump · 03-05-2016, 02:56 PM

The silence from the OP is ominous.

Vesper Martini · 03-05-2016, 02:58 PM

Quote:

Originally Posted by mike_nofx

This is what I was thinking.

Who would even accept an XH Ute as collateral for anything? Unless this Home loan was taken out back when the XH was relatively new.

I think if you went to a bank today with your XH as collateral they'd laugh at you

Exactly, there's holes in this story.