[foxgirls]

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

[It'sallgood]

KNow nothing about this sort of thing.

But my gut feeling is that it's very suss adn be very careful...you say you have spoken with teh leasing company? ABout this car / people specifically or have you just generally asked a question?

Have you specifically spoken with the sellers about buying the lease out and paying the leasing company the pay out amount NOT them? What did they say?

They are leaving the country which yes, makes it all the more concerning if something goes awry.

Good luck,
Tamm

[foxgirls]

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.

This post has been edited by foxgirls: 27/12/2012, 04:28 PM

[JuliaD]

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.

[Juki]

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

[foxgirls]

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.

[aidensmum]

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.

[KT1978]

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!

[kelliev]

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!

[kelliev]

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.