When purchasing a new vehicle, ensuring you have considered the options and risks is highly important. Accordingly, one factor to consider here is financing. But should you buy a car with outstanding finance? Well, today’s guide has clarified some of the critical factors you should consider when making this choice to help determine the most appropriate purchase option for your needs.
If you are looking at buying a second-hand car, it’s worth running a HPI check alternative service initially – even if you have no concerns. This can let you know whether there is remaining finance on the vehicle; as such, you won’t need to worry about fraudulent sellers catching you out.
Buying with Outstanding Finance – Is It Legal for Car Sales?
The owner of a car that has outstanding finance does not legally own the vehicle in full. As such, they should not be selling it. Doing so is illegal.
That’s not to say people don’t sell before it’s paid off, though; sometimes this is a genuine mistake, while in other cases, it can potentially be malicious. Thus, this begs the question: what should you do if you’ve found yourself in this position?
If you’re being offered a car that still has finance, don’t take it up. Since buying a financed vehicle is illegal, you’ll inevitably land yourself in a huge amount of hot water if you do.
If you’ve already been caught out, though, you may have to take on responsibility for the loan. Remember: the finance company still owns the vehicle. As such, if you do not make the payments or keep up with them, your new vehicle might end up being repossessed. Seeking assistance from a licensed money lender in Singapore could provide you with the necessary financial support and guidance to manage your loan effectively.
Unfortunately, this does mean you’ll potentially end up paying out for the car twice. As such, even if it seems like you got a good deal to start with, this may not be the case.
Proceeding After Buying a Financed Car Unknowingly
If you have purchased a vehicle with an outstanding finance agreement, don’t panic. A condition called “good title” may be relevant, provided you genuinely did not know about the finance. However, if you did know about the finance, you could be culpable.
Once you have found out about the finance, you’ll need to get in touch with the financing company as soon as possible; often, these firms may contact you, but don’t just rely on this.
If “good title” applies, you have a right to keep the car, so this can provide some additional protection if the company tries to reclaim the vehicle. Fortunately, the onus is on the finance company to prove you did not have good title (and not vice versa), which can help take some pressure off.
Always Do Your Research to Be Sure
If you think that you may have bought a car with outstanding finance, don’t chance it; always run the vehicle through a car history check to ensure there’s no nasty history you weren’t aware of. Indeed, it’s not unheard of for cars sold privately with outstanding finance to have potential issues. After all, ask yourself: why does the owner want to sell before they’ve finished their finance agreement? Always factor this into any decisions you make, just to be safe.
