A question of finance

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#2167684 26-Jan-2019 06:43

It could be a case of a misguided effort from the buyer to make the process easy for you as the seller - filling out forms for you etc. They might be mindful that finance is a bit more tricky than a cash sale. Regardless, advice in this thread is good - contact finance company directly on publicly listed contact details

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#2167725 26-Jan-2019 09:00

Dratsab:
Stu: No finance company should need YOUR driver's licence. You're not the one after a loan.

No, but he's with one who'll end up with the loan if he gives those details over. Nothing like getting a hefty loan to have your car taken away :-)

The finance company can make all the checks on the vehicle it needs without any information about the seller. Once that's done, if they need to verify the identity of the seller (proof of ownership), they can do the legwork in a nice legal manner - proper forms/letterheads and all as befitting a company setting up a legal contract.

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#2167753 26-Jan-2019 10:18

TENKAN: Lias

Yes definitely good advice, I'm thinking I'm going to walk away from this, I mean I can't understand why a finance company wants to pay me directly?
If I take out a loan from any of them once approved they simply deposit the money into my bank account and I can go and buy whatever I like with it, right?

They will want to directly pay the seller of the car so they can be sure (and can prove) that the car was purchased by their customer.

Such loans are often high risk, with regards to the borrowers ability to repay. As such, they want to be very sure that they have something to re-possesses if the borrower defaults. (some car finance companies will even install (as a condition of their loan), GPS trackers and remote kill switch to the car. Miss a payment, and car engine won't start the next morning unless you make arrangements with them.

Imagine if you loaned somebody money for a car, and they actually spent it on gambling / drugs / travel / paying off existing debt for loan sharks etc. Now you have no collateral for for your loan.

Of course this is all hassle for you, with the only benefit being a larger pool of buyers for your car.

Its a bit disappointing your buyer didn't indicate his offer was subject to finance company approval, as there is a risk they could decline the loan, forcing your buyer to abandon the deal.

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#2167774 26-Jan-2019 11:06

TENKAN: Lias

Yes definitely good advice, I'm thinking I'm going to walk away from this, I mean I can't understand why a finance company wants to pay me directly?
If I take out a loan from any of them once approved they simply deposit the money into my bank account and I can go and buy whatever I like with it, right?

Unlike a typical bank personal loan (even to buy a car), the finance company will use the car as security. Hence they will want to pay you directly as:

a) it ensures the loan is used for it's stated purpose (purchase of the car)

b) It establishes a PMSI for security purposes - not so relevant for a private purchasers but if the buyer is buying it for their business and the company has a GSA on it then it can cause complications (the alternative - to get a deed of subordination and priority is a lot more of a hassle)

By requiring your drivers license it establishes that you own the car and also some recourse if you don't transfer the car ownership over to the buyer.

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#2167781 26-Jan-2019 11:20

There is some poor, ill-informed, advice and commentary in this thread. I suspect the purchaser is taking the loan out in the vendors name, will keep the car and default on the loan and disappear.

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#2167805 26-Jan-2019 11:54

Normally your first instincts are correct. If your alarm bells are ringing then back off from the sale. Otherwise as others have indicated you'll need to do your own due diligence so as that you don't get stung.

My gut feeling is identity fraud and with your licence details "buyer" could apply for loans under your name.

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#2167812 26-Jan-2019 12:00

BlinkyBill: There is some poor, ill-informed, advice and commentary in this thread. I suspect the purchaser is taking the loan out in the vendors name, will keep the car and default on the loan and disappear.

Dealing directly with the finance company eliminates that risk.

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#2167813 26-Jan-2019 12:02

logo: By requiring your drivers license it establishes that you own the car and also some recourse if you don't transfer the car ownership over to the buyer.

Aside from being used/regarded as a de-facto identity card, drivers licences denote a persons allowance to drive the types of vehicles specified on the licence and any restrictions there may be. They don't prove the ownership of anything. Ownership of vehicles is listed in a NZTA database.

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#2167815 26-Jan-2019 12:08

Dratsab:

logo: By requiring your drivers license it establishes that you own the car and also some recourse if you don't transfer the car ownership over to the buyer.

Aside from being used/regarded as a de-facto identity card, drivers licences denote a persons allowance to drive the types of vehicles specified on the licence and any restrictions there may be. They don't prove the ownership of anything. Ownership of vehicles is listed in a NZTA database.

Sorry - misworded - a vehicle check easily establishes who owns the vehicle. A copy of the drivers license which matches the ownership of the vehicle means you're dealing with the legitimate owner of the vehicle.

The same as if I go into a bank and try and open a bank account for a company. A company check shows who the directors are. I still have to verify that I am a director (drivers license, passport etc...)

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#2170565 31-Jan-2019 09:21

@TENKAN what was the outcome of this in the end? Did you get in touch with the finance company?

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#2170571 31-Jan-2019 09:34

Hi there, we took the advice from a few members here and walked away (ran maybe ! )
It was just to much hassle, we didn't want to have to deal with a 3rd party ( although we never did get the details from the potential buyer who it was )

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#2170812 31-Jan-2019 15:20

Nonsense. Finance companies don't pay private sellers.

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#2170829 31-Jan-2019 15:30

pctek:

Nonsense. Finance companies don't pay private sellers.

Vehicle loans/finance are always paid direct to the seller the money never touches the borrowers bank/hands.

Just to be clear we are talking about vehicle loans not personal loans.

This has been the case for quite some time now.

This is done to stop people attempting to defraud the loan companies and pocket the cash and then the car disappears.

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#2170830 31-Jan-2019 15:33

TENKAN: ( although we never did get the details from the potential buyer who it was )

That pretty much answers your question.

Not worth the risk in my opinion, time is money and I suspect you would have spent a lot of it if you went ahead with that deal!

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#2170902 31-Jan-2019 16:21

ratsun81:

pctek:

Nonsense. Finance companies don't pay private sellers.

Vehicle loans/finance are always paid direct to the seller the money never touches the borrowers bank/hands.

Just to be clear we are talking about vehicle loans not personal loans.

This has been the case for quite some time now.

This is done to stop people attempting to defraud the loan companies and pocket the cash and then the car disappears.

Yep, from previous personal experience, the finance company paid me directly when I sold my car a few years back. But this was with MTF finance, who are pretty established so had no concerns there.. Plus the purchaser did not ask me for the same info the OP was asked.

From memory, I'm pretty sure purchaser forwarded my contact details to MTF and they got in touch with me to sort out payment....

Definitely sounds dodgy here, so good thing you walked away OP.

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