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How to Buy a Car With Money Owing?

3 years ago

So, you've found your dream car but there is money owing (registered security).  Don't despair, this can be resolved.  Here's our recommendation:

Assuming the security has been registered by in the seller's name, the first step is to ask them to remove it before exchanging any money.  If the security has been registered by a prior owner you should ask the seller to try and get it removed.

Once the seller says that the security has been removed, you should generate a new VIR® to confirm the vehicle has clear title. This is a quick, easy and thorough way to be certain.

Remember, the Secured Party (typically finance companies, but they could be banks, vehicle repairers, motor vehicle dealers etc.) listed in the security will only discuss the details of the security with the vehicle owner (the debtor).

Steps to follow if the seller is reliant on your payment to settle the loan:

If the seller is reliant on your payment to repay the loan to the finance company you could arrange to pay the finance company directly yourself (do not rely on the seller to do this), and pay the remaining amount to the seller.

  1. Ask the seller to request a Settlement Statement from the Secured Party (Finance companies etc.). n.b. Ensure you are witnessing the original document.The Settlement Statement will state the amount required to repay the loan in full. The settlement statement will only remain valid for a short time.
  2. Check the Financing Statement number on the Settlement Statement matches the Financing Statement number on the security against the vehicle you are checking.  (The VIR report Financing Statement number is contained within a VIR).
  3. Make two payments: one to the secured party (Finance company) to repay the loan in full (the settlement figure) and the other for the remainder of the agreed purchase price to the seller. n.b. ensure you reference the Financing Statement number when making a payment to the secured party (Finance company).

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