Purchasing car with security finance interest

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Geekeneer

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#303115 17-Jan-2023 13:02

What is the best way to purchase a vehicle with finance interest?

I ran the PPS search and it spat out the name of seller and their address who the security is registered against (2 persons).

Myself not being familiar with how the security interest works here in NZ, I believe I could do it 2 ways.

1. I pay seller agreed price in physical meet up. Take vehicle immediately. Await confirmation from seller of settlement (what proof can I request?). Officially transfer ownership (This places a great deal of trust on seller to settle, and risk to myself of taking vehicle prior to changing ownership, acknowledging the fact that I have the persons names and address)

2. Request settlement certificate from owner/finance institution. I pay finance institution directly, and pay the seller the balance, both in physical meet up. Officially transfer ownership and take vehicle immediately.

While option 2 sounds the better way, the seller is pushing back on that option. I also do not know the settlement balance.

Are there any other ways to do this?

1 | 2

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#3022706 17-Jan-2023 13:06

Option 2 - not sure why the seller would push back on that? you definitely want the vehicle settled otherwise you run the risk of it being repo'd.

Option 1 - how do you know they will settle? refer back to option 2 above. - on settlement they finance house will provide a letter of settlement.

I have bought/sold about 10 vehicles since landing in NZ and luckily never had an issue with wanting to pay the bank/finance house directly.

Lias

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#3022713 17-Jan-2023 13:24

The seller pushing back on you paying the finance company directly should be a giant red flag IMHO.

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trig42

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#3022715 17-Jan-2023 13:28

Walk away.

If the seller doesn't want you to pay off their finance, what makes you think they will do it after you give them a wad of ca$h?

Security would still be registered on that vehicle, and if they don't settle it, a bailiff could come calling for it.

networkn

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#3022724 17-Jan-2023 13:40

trig42:

Walk away.

If the seller doesn't want you to pay off their finance, what makes you think they will do it after you give them a wad of ca$h?

Security would still be registered on that vehicle, and if they don't settle it, a bailiff could come calling for it.

This, this this this this this this.

Don't buy this car. You'll almost certainly regret it if you do.

Plenty of cars in for sale, find one with a clean title.

MadEngineer

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#3022730 17-Jan-2023 13:55

I’d be curious to know what the finance company thought of their car being sold. You could ring them on the premise of asking if they’d transfer the debt to your name. Note that paying off a car loan will incur fees so the current owners won’t be doing that.

You're not on Atlantis anymore, Duncan Idaho.

Silvrav

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#3022733 17-Jan-2023 13:58

MadEngineer: I’d be curious to know what the finance company thought of their car being sold. You could ring them on the premise of asking if they’d transfer the debt to your name. Note that paying off a car loan will incur fees so the current owners won’t be doing that.

Note, rather that it COULD incur fees, but not always. Have settled 5 vehicles early in the last 5 years and only once paid a $15 admin fee.

sen8or

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#3022744 17-Jan-2023 14:07

2 security interests is a concern in itself, but no way in hell would I part with a single cent to the seller without either a clear PPSR on the vehicle, or, paying both security interests directly with written confirmation from them about the amount required to settle the encumbrance and date to which it is valid.

I would be inclined to require this proof direct from the security holders, on their own letterhead, not simply an email or text etc.

This sounds like a FB market place deal about to go horribly wrong for you.........

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hsvhel

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#3022752 17-Jan-2023 14:25

Option two is the only way I have ever completed a finance sale

Pushing back is 100% a walk away on that

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Handsomedan

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#3022757 17-Jan-2023 14:33

I worked in vehicle finance for a few years.

Effectively, the seller doesn't own the car - the finance company does. If they don't get a settlement figure for you and allow you to pay the finance company directly, they will likely not do it and you'll lose the money and the car and you'll have little to no recourse.

Either:

A) Ensure you get an up-to-date settlement figure from the Finance Company and pay them directly, then complete the change of ownership forms at a VTNZ branch or online to take ownership of the vehicle legally.

B) Walk away and find a car that doesn't have finance owing.

NEVER, NEVER, NEVER give the seller the money and expect them to do the right thing. 9/10 they will not do the right thing.

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MadEngineer

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#3022758 17-Jan-2023 14:35

Silvrav:

MadEngineer: I’d be curious to know what the finance company thought of their car being sold. You could ring them on the premise of asking if they’d transfer the debt to your name. Note that paying off a car loan will incur fees so the current owners won’t be doing that.

Note, rather that it COULD incur fees, but not always. Have settled 5 vehicles early in the last 5 years and only once paid a $15 admin fee.

Further, a fixed loan of x amount owing will also be payable for the remaining interest for the whole term on top of the loan balance.

You're not on Atlantis anymore, Duncan Idaho.

Geekeneer

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#3022773 17-Jan-2023 15:07

wow thanks all for the replies.

Didn't know option 1 was a complete no no no. My trusting nature got the better of me.

Nonetheless, lessons learnt for future and especially how to go about this scenario in future.

First red flag would have been accepting 16k for a car advertised at 20k.

Trademe Value at $21850

trig42

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#3022790 17-Jan-2023 15:41

Probably owes more than $20k on it :)

networkn

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#3022793 17-Jan-2023 15:52

Geekeneer:

First red flag would have been accepting 16k for a car advertised at 20k.

Trademe Value at $21850

Nah, that wouldn't be a problem (on it's own), I've gotten bigger discounts on legitimate purchases. The red flags are the other things. Just walk away Reneé