Are you planning to buy a car? Whether you buy from a private seller or a dealer, the foremost thing you should check with the vehicle is whether or not it is still on a finance agreement.
Yes, it’s true that purchasing a used car is usually a cheaper option than getting yourself a new set of shining wheels. However, you need to be extra watchful in order to avert being scammed.
It’s wise to conduct some importance checks while purchasing a used car to ensure everything is just as it seems. For instance, wouldn’t you like to know whether the car has any costly fault? Is the car stolen or does it have any finance outstanding on the car?
Keep reading to know how to find out when a car has a loan owed to a finance company and what you need to do if you unknowingly buy a car with outstanding finance.
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Should you buy a car that is on outstanding finance?
Technically, it is not possible to purchase a car with outstanding finance as in such cases, the seller is not the legal owner of the car and hence he won’t be in the position to sell off the car. When a party is still repaying the dues on the car, the finance provider is the owner of the car and not the driver. As soon as all the payments are done on the car, the ownership gets transferred to the drive.
Check if a car has an outstanding finance agreement held against it
The legal owner of a car must give consent to selling which in this case is the financing company. It is in fact illegal to sell a car if there’s someone who still owes money on the finance agreement. You can opt for hpi CarVeto check to conduct such finance checks on your used car before buying.
If you don’t want to purchase a car with outstanding finance, you should do a vehicle history check that will give you details about the car, with its finance situation. For free checks, you can check whether or not the car has an up-to-date MOT but for further details, you’ll have to pay. The extensive checks will give you the following details:
- Whether the vehicle has outstanding finance and if it does, which company is offering it
- Whether the car has been stolen
- Whether the car has been involved in any accident
- Whether the car was written off or repaired
The charge required for these checks is nominal, not more than 20 pounds. You might feel that these checks are not required but it is worth doing them, especially when you have to highlight any issues with the car. Once these checks are done, you don’t have to worry about the potential stress that may arise after you buy the car. In case of problems with the car, make sure you back out before the completion of the transaction.
More car history checks
Free vehicle checks are available via the DVLA check website. Here you can look out for road tax and MOT status, V5 issue dates and other pertinent vehicle data.
What happens when the car is delinquent on its dues?
Do you find that the car has outstanding finance? If yes, you shouldn’t proceed with the car sale unless the dues are settled. You need to ask the seller about the car finance and request him to pay off the dues before you proceed with the sale. It is expected that the seller will later on pay off the settlement amount but you shouldn’t vouch for what they say. Check the documents as proof and get in touch with the finance company to confirm things.
Both the seller and you should reach an agreement where you repay the settlement amount and take off the sum from the initial car price. You can contact the financing company to be sure about whether or not the settlement amount that the seller gave you is correct.
So, if you’re eager to buy a used car, make sure you check all the above listed facts to avoid any future discrepancies. Get in touch with a pro company that can help you with this.
