Jump to content

Does this sound to good to be true?


  • Please log in to reply
19 replies to this topic

#1 FERALfoxgirls

Posted 27 December 2012 - 04:16 PM

So i'll try to make this short.. here goes.

We are looking at a car that would usually sell for 45-50 grand to buy used.
So we see a car advertised for 41.000. that is perfection! We ring them, this is their story.. The car in question is leased, they need to sell the car to pay off the lease before they go OS. We saw the car advertised for 46.000 before xmas, but obviously they are heading OS next week and are getting despo so have reduced the price dramatically. Obviously we can't just trust them to give the 41,000 to the lease company!
So I ring consumer affairs, and they say it is illegal to sell a car if it is under finance, and a lease is the same as finance. But what buyers usually do is pay the lease company direct.
So we speak to the lease company, who have said we can make the cheque payable to them, and can get a final payout figure from them before we pay, so we can see that their is certainly no more owing on the car than the 41,000 asking price. And the sellers have been very honest and met all our requests thus far.
One side of me thinks it should be fine if all thats said above is done. But the other side of me is worried about something going wrong, if these people leave the country and the lease company take the car.

So my wise E.B-ers, i'm just asking for a fresh look at the situation, something me or DH may not have thought of etc etc. Or someone who may had had this experience.
TIA
original.gif


#2 FERALfoxgirls

Posted 27 December 2012 - 04:28 PM

Yep, spoke to the lease company about this car, obviously they couldn't speak to us about the sellers account.
And yes the seller is happy for us to give them a NN cheque written to the lease company AFTER we have seen a figure for the amount of the final payout.

Edited by foxgirls, 27 December 2012 - 04:28 PM.


#3 JuliaD

Posted 27 December 2012 - 04:29 PM

Its not illegal to sell a car under market value, that's their problem.
I don't see any issue with the deal, but just make sure you have the car checked out mechanically before purchase, and that the encumbrance (title) has been removed before you take ownership (your bank will do this for you anyway).
Just be aware though, that with the encumbrance on the car, it could take longer than a week to have everything finalised - this will be the only issue with the current owners heading overseas.

#4 Juki

Posted 27 December 2012 - 04:33 PM

If you aren't doing through financing, you can check the ownership and any encumberances on http://www.ppsr.gov.au/Pages/ppsr.aspx



#5 FERALfoxgirls

Posted 27 December 2012 - 04:41 PM

JuliaD, we were told by legal aid that it is illegal for a person to sell a car if its under finance. Your right, the fact that it is well under market value is not an issue legally for either party.

Juki, we have paid the $30 odd dollars to ppsr, it showed the people who are selling the car are the owners, and the car is under lease/finance. So we have checked what the sellers are telling us, and it is true according to ppsr.

I am worried that there is someway after we have paid out the lease, and they have signed the car in our name and all that usual stuff has happened, that something i had not thought of could pop up, and these people are in Germany.

#6 aidensmum

Posted 27 December 2012 - 04:42 PM

I thought it was pretty normal to make a cheque out to the lease company or the finance company who has an interest in the vehicle.  How else would anyone with finance on a car sell it?  You want the title clear before you drive it away and they cant payout the finance until you do it for them.

#7 KT1978

Posted 27 December 2012 - 04:54 PM

I have heard of scams around these kind of things.

Make sure you check rego papers and vin numbers against the documents from the lease company.

It could be legit but tread carefully!

#8 kelliev

Posted 27 December 2012 - 05:01 PM

I worked in finance/leasing for many years and what you have done is absolutely correct. Under the terms and conditions of the lease if the lessee wishes to break the lease early the leasing company can request the vehicle back, sell it themselves and work out any shortfall with the lessee. In my almost 10 years in this industry I didn't see that occur once, in all honesty it's too time consuming for the financier. By the leasing company providing a payout figure, they are telling you & the lessee they are happy to release the vehicle title/ownership once the outstanding monies are paid.

Now that you have established there is an encumberance you need to request the vendor to obtain a payout letter from the finance company. This will provide you with the exact payout figure, payment details and an expiry date. To protect yourselves you need to make the payment to the finance company directly and then any additional funds in a separate payment to the vendor. DO NOT give the full amount to the vendor and expect they will pay out the loan, this will leave you wide open to danger. You want to make sure that finance is paid in full. You can request the finance company provide some sort of letter/receipt once payment is received and advising of their intention to release the encumbrance on the vehicle. The vendor may also want this confirmation from the finance company before releasing the vehicle to you anyway. It can be worth completing another encumberance check a month or so afterwards to ensure the encumberance has been removed as it can be a hassle when you try and sell if it's something that has been left on there - and years earlier! As long as you get the vendor to sign the transfer papers prior to them leaving the country I cannot see any issues with the sale. It all seems fairly genuine to me.

Enjoy your new car! original.gif

#9 kelliev

Posted 27 December 2012 - 05:03 PM

I should add (as PP pointed out) to check that the names match on the payout letter/rego papers etc and all identifiers match - rego, chassis/vin, engine numbers etc.

#10 LynnyP

Posted 27 December 2012 - 05:12 PM

As long as you follow the excellent advice from kelliev, I can't see any problem at all.  Good luck, the timing has worked for you by the looks.

#11 FERALfoxgirls

Posted 27 December 2012 - 07:18 PM

Thank you so much to all of you for your replies. Kelliev you are a champ, thanks for that info, so valuable! So do you think there is any way the vendor can stuff around with a cheque that is specially written to the lease company? The lease company may only have offices in the city that works mon-Fri and we can't pick it up (DH working tomorrow) til sat.
Vendor is getting a final payout release thingo tomorrow so will be sure to re-check the names of rego, seller and the pprs check we did today also.
Thanks again everyone ... So helpful  biggrin.gif

#12 Illiterati

Posted 27 December 2012 - 07:46 PM

I bought a car from a bank manager this way. I paid him, he paid out lease company and the rego was transferred to us. I think it was a novated lease. It sounded dodgy but it went smoothly. I would do it again but would always still check the background etc.

#13 Mouth

Posted 27 December 2012 - 07:57 PM

I work in finance - kelliev is correct. No they can't stuff around with a cheque. Check with the lease company who the cheque should be made payable to, to pay out that lease. It is possible that the cheque may need to be made payable to the seller's name, as the account with the finance company is more than likely in the sellers name. I would be asking for bank transfer details to get it through faster/safer to the finance comany if I was you.

#14 Avidlearner1

Posted 27 December 2012 - 07:58 PM

We have done this before, just recently when we purchased my BMW and if you follow PP's excellent advice then everything seems above board.

Good luck and happy buying.

#15 Tealdash

Posted 27 December 2012 - 08:02 PM

QUOTE
To protect yourselves you need to make the payment to the finance company directly and then any additional funds in a separate payment to the vendor. DO NOT give the full amount to the vendor and expect they will pay out the loan, this will leave you wide open to danger.


I agree with this... original.gif

We have brought vehicles before and this is how it was all handled original.gif







#16 ~~HappyMummy~~

Posted 27 December 2012 - 08:08 PM

No big deal.  I've done this before - the seller told me the car had finance on it.  I checked and paid XX to the finance company directly and XX to the seller.  All was fine.

#17 TillyTake2

Posted 27 December 2012 - 08:10 PM

The only thing I can think of is that I would make sure you give both cheques to the seller at the time you take possession of the car. DON'T pay out the finance company & then give the reminder to the seller afterwards.

If you pay out the finance company (by DD or sending a cheque) before the handing over of the car has happened then what is to say they won't just do a runner & not give it to you now that you've kindly paid off their car!!

Edited by TillyTake2, 27 December 2012 - 08:12 PM.


#18 aussiecita

Posted 28 December 2012 - 12:30 PM

I used to work in vehicle finance, so I can chime in and say this is a common type of sale with leased vehicles, happens all the time. It protects everyone's interests. You pay the leasing company directly, so in the worst case scenario where the seller didn't hand over the vehicle, you'd get your money back, since you don't owe the leasing company anything. The seller doesn't worry about your money not clearing, since they won't give you the vehicle until it's been paid out.

Bear in mind, the leasing company can't confirm any info with you (payout figure, bank account, account number) unless the seller either calls or fills out a letter of authority to give you permission to talk to the leasing company. Nor can the leasing company confirm any amount was received unless you have this permission. The seller could also call them in your presence for your peace of mind, or show you letters on their letterhead. The seller can also request that the leasing company sends you an email/letter confirming the vehicle was paid out in full.

If there is a shortfall (i.e. the sellers owe more than you're buying it for) then they need to make that shortfall payment to the leasing company. Then the leasing company will issue a payout letter, confirming the exact amount that needs to be paid - which should be the amount you & the seller agreed upon. If you need to pay the seller more than the amount of finance owing, then you pay the e.g. $40k to leasing company, and $5k to the seller when you take possession of the vehicle.

Next step is making payment directly to the leasing company. If I recall correctly, we only accepted cheque or bank transfer - no direct debits or credit cards. The clearance time was 2-5 business days. We got a lot of frustrated people who waited till the eleventh hour to arrange the sale, and were cranky about the clearance periods. But what can you do? The leasing company needs to have received the money in full and it must clear before they will release the encumbrance over the vehicle.

On occasions, we would accept RTGS payments, so the title could be lifted asap - the same or next business day. It wasn't info we were allowed to volunteer though. This would probably only work if the seller politely called the leasing company, requested RTGS and had a friendly supervisor willing to go the extra mile for them. But they don't have to do this, so the seller can't expect it.

The title is on the PPSR, and we normally lifted them in bulk once or twice a week. Again, with the seller going overseas, I would advise the seller to call the leasing company, be friendly and build some rapport with them, and ask for it to be manually discharged once the seller knows the funds should have been received & cleared.

Hope this helps, enjoy the new car.

Edited by aussiecita, 28 December 2012 - 12:33 PM.


#19 aussiecita

Posted 28 December 2012 - 12:38 PM

QUOTE (TillyTake2 @ 27/12/2012, 08:10 PM) <{POST_SNAPBACK}>
The only thing I can think of is that I would make sure you give both cheques to the seller at the time you take possession of the car. DON'T pay out the finance company & then give the reminder to the seller afterwards.

Paying the money directly to the seller, and then hoping the seller pays all outstanding monies to the finance company is a really risky strategy for the buyer!

Also, writing a cheque to the seller is a painful way to make the final payout. If the OP pays the seller, then the seller deposits it in their bank and pays the finance company, you're looking at two different mandatory clearance periods before the finance company will lift the encumbrance and the vehicle can legally transfer hands. Much quicker and safer for the buyer to pay the finance company directly.

QUOTE (TillyTake2 @ 27/12/2012, 08:10 PM) <{POST_SNAPBACK}>
If you pay out the finance company (by DD or sending a cheque) before the handing over of the car has happened then what is to say they won't just do a runner & not give it to you now that you've kindly paid off their car!!

This is well-meaning but bad advice. The OP doesn't owe anything to the finance company. If she pays and the seller doesn't hand over the vehicle, then she has recourse to have her funds returned by the finance company. If the seller did a runner, then they owe money to the finance company, and the finance company will chase them.

Edited by aussiecita, 28 December 2012 - 12:42 PM.


#20 iwanttosleepin

Posted 28 December 2012 - 04:37 PM

we've actually had to do this ourselves as the seller!

Novated lease and moving overseas.






1 user(s) are reading this topic

0 members, 1 guests, 0 anonymous users

 

A mum's tragic battle against inflammatory breast cancer

At just 37 years of age, with two young sons, Vicki was diagnosed with inflammatory breast cancer. Now her family wants all women to know the symptoms.

The business of babies around the world

Pregnancy and birth is an intriguing process no matter where you are in the world. One soon-to-be father gleans wisdom from a new guide.

Finding a positive path through IVF

It’s not surprising that IVF is often seen as a negative journey towards the ultimate positive, but having a glass-half-full approach can make a big difference to the experience.

Giving strangers the gift of parenthood

A mum explains why she and her husband are choosing to gift their leftover embryos to help strangers achieve their dream of parenthood.

Does morning sickness get better or worse with each child?

Just as every baby is unique, so is every pregnancy. And that means morning sickness can vary a lot, too.

What's so wrong with looking 'mumsy', anyway?

Why is it that the word ‘mumsy’ has connotations of such a negative nature – but seems to be the only other option apart from ‘yummy’?

Trying to speed up the inevitable

As the waiting game of late pregnancy continues, this mum considers a few things that might hurry things up a little.

One month later: where is William Tyrell?

It has been a little over a month since William Tyrell disappeared from his grandmother's home, 33 long sleepless nights for his family as they mourn the absence of their cheeky young boy.

Winter's child less likely to be moody: study

Babies born in the summer are much more likely to suffer from mood swings when they grow up, while those born in the winter are less likely to become irritable adults, scientists claim.

Single mum of two creates award-winning baby app

Suddenly single with a baby and an 11-year-old son, Tara O?Connell developed an app to improve the lives of mothers who were similarly overwhelmed.

Food for thought: looking after yourself as a new mum

As soon as your baby enters the world, everything else takes a back seat - even the necessities of daily life such as eating are severely compromised, right when you need energy the most.

'Grabbable guts' campaign aims to cut toxic fat

The Live Lighter campaign will take people inside the human body to show the internal dangers of being overweight.

The best and worst month of my life

A new mum's first month of motherhood didn't pan out as expected when she lost a family member weeks after her baby's birth.

Facebook and Apple offer to pay female staff to freeze their eggs

Facebook and Apple are hoping to provide women with the freedom to build their careers without the added pressure of having children at or by a certain age.

How a pregnancy contract could work for you and your partner

The idea of making a 'pregnancy contract' with your partner may sound a bit silly at first, but it can help make the transition to parenthood a lot smoother.

Finding a mum-friendly personal trainer

Burping babies vs burpees – yes, new mums and personal trainers live in different worlds. But they can work together - once you find the right match for you and your lifestyle.

Alleged baby snatch incident a ?misunderstanding?, say police

Police say that an incident in which a man pulled on a woman?s pram while walking a popular Sydney route late last month was a misunderstanding.

Ebola killed my aunt and is shutting down my country

Three weeks ago, my auntie, a midwife, developed a fever. Sitting here in Sydney basked in Australian sunshine, that shouldn't be big news.

The night my ovary burst

One mum shares her frightening experience and vows to never take her health for granted again.

Download now: Essential Kids Activity Finder app

Got bored kids? Quickly find the best activities for kids wherever you are in Australia with the Essential Kids app.

 
Advertisement
 
Advertisement
 
 
 

What's hot on EB

16 parenting truths you won't find in the baby books

I am five years into this parenting gig and I’ve learnt that sleepless nights and changing dirty nappies are child’s play.

Win 1 of 5 Canon Powershot D30 cameras

Capture life more easily with the Canon Powershot D30. Shockproof, waterproof and dustproof, you can take it almost anywhere and shoot beautiful images, time after time. Enter now!

Best and worst potty party cakes

It's nice to celebrate a child making the shift from nappies to 'big kid' undies, but do we really need a semi-realistic used toilet cake to do it? Here are some of the best and worst cakes parents have used at 'potty parties' around the world.

7 tips for a financially festive Christmas

Plan ahead - and do it now - to ensure festive season expenses don't break the bank.

'Go the F*** to Sleep' author's new book for frustrated parents

A sequel is coming soon to the 2011 hit book 'Go the F*** to Sleep' - and this time, it's about mealtimes.

Great birthday party buys from Etsy

Handmade crafts to decorate and personalise your child's next birthday - from banners to cake decorations, we've got gorgeous party finds from Etsy.

Creative storage ideas for the kids' rooms

Creative and practical storage ideas for the kids' toys and books can also add some stylish decor to your home. Visit babyology.com.au for more stylish modern finds for hip kids & parents.

Student shocked by surprise baby

Kate Hudson, 22, was on a dream European holiday with friends. She didn't realise she was about to become a mum.

To the mum in the doctor's waiting room

Maybe the mum I saw in that waiting room, seemingly disconnected from her baby, doesn’t have the support she needs.

10 space-saving nursery ideas

Starting a family doesn't always mean moving into a bigger house - not yet, anyway.

 

What's in a name?

Baby Names

Looking for a classic name, or an unusual name? Our Baby Name Finder is for you, search or browse to refine your shortlist.

 
Advertisement
 
 
Essential Baby and Essential Kids is the place to find parenting information and parenting support relating to conception, pregnancy, birth, babies, toddlers, kids, maternity, family budgeting, family travel, nutrition and wellbeing, family entertainment, kids entertainment, tips for the family home, child-friendly recipes and parenting. Try our pregnancy due date calculator to determine your due date, or our ovulation calculator to predict ovulation and your fertile period. Our pregnancy week by week guide shows your baby's stages of development. Access our very active mum's discussion groups in the Essential Baby forums or the Essential Kids forums to talk to mums about conception, pregnancy, birth, babies, toddlers, kids and parenting lifestyle. Essential Baby also offers a baby names database of more than 22,000 baby names, popular baby names, boys' names, girls' names and baby names advice in our baby names forum. Essential Kids features a range of free printable worksheets for kids from preschool years through to primary school years. For the latest baby clothes, maternity clothes, maternity accessories, toddler products, kids toys and kids clothing, breastfeeding and other parenting resources, check out Essential Baby and Essential Kids.