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Outstanding Finance: Buyer's and Seller's guide

Outstanding Finance
Buying a car on finance is a great way to fund your dream car, however when it comes to buying and selling consumers need to be aware of the risks of outstanding finance.
What are the dangers of outstanding finance for a buyer?
By purchasing a car that still has money owing on it you could be left to settle the unpaid bill – or face having it repossessed by the finance company who legally owns it.
Risks of outstanding finance:

  • If the loan remains unpaid when you purchase the vehicle you will never actually own it.
  •  If the finance company has any interest in a car, they will track down the vehicle to repossess it.

The best way to safeguard yourself against outstanding finance is by doing an HPI Check. If you do find your dream car and discover that it has outstanding finance on it, there are some ways you can complete the sale safely.
How can you buy a car with outstanding finance?
So you’ve found your dream car but your HPI Check shows it has outstanding finance against it. What  can you do? Ask HPI to get in touch with the finance company to see if there is any current interest in the vehicle (sometimes they can inadvertently forget to delete interest)
[dropcap]1[/dropcap]If there is outstanding finance against it,  go back to the seller and ask them to arrange payment. If the seller has paid, ask them for evidence – the finance company should be able to provide a letter of confirmation.
[dropcap]2[/dropcap]If the seller is not in a position to pay off the loan and says that he/she will pay the finance off with the money you are paying for the vehicle, the safest option would be for you to pay the finance off directly to the Finance Company. You can then pay the seller the remaining balance. You would have to contact the Finance Company to make sure they would be happy with this arrangement.
For the different types of finance agreements and to understand what they mean,  click here.
If you have any questions, or would like any more advice call our friendly team on 0845 300 8905 or leave a comment below
Happy Driving,