Private Sale with Outstanding Finance - How to pay?

[Chris.B]

I’m looking at buying a used car privately. The car is high value, and has outstanding finance on it with BMW Financial Services.
Whilst I naturally distrust everyone, the seller was honest and told me about the outstanding finance before I did a HPI check on the car and saw for myself.
The outstanding finance is a lot of money, and the vast majority of the for-sale price (nearly 90%), with only a smaller balance going to the seller.

The seller has suggested that I pay the BMW Financial Services directly. This makes sense to me, as that way I know that the money actually goes to the finance company rather than there being any chance that the money is pocketed to pay off an overdraft and me ending up with a car that the finance company are still chasing.

Can anyone offer any advise on doing this in a low-risk manner? Process, sequence, timing, etc for conducting the payment. I presume buying a car with outstanding finance is a concept that people must have done before?
Questions that are spinning around in my head...

• If on the day I make an online bank transfer to BMW Financial Services directly (agreement number as the reference or whatever), can the seller ring up BMW Financial Services and be told “yes paid in full” and release the car to me? How long does it take for BMW Financial Services to clear it? Can I do it on the day?

What I don’t want is to make the online bank transfer to BMW Financial Services several days in advance, and then when I turn up the seller has done a runner with me having cleared his finance in full as a late Christmas present!

• How do I confirm that the amount the seller has told me to pay BMW Financial Services is indeed the settlement figure? The number they’ve told me sounds reasonable, but whilst what they’ve told me is 90% of the for-sale price, what if it’s really even more and closer to 100%? I presume BMW Financial Services wouldn’t want to speak to me to confirm?

• Alternatively, can the seller release the car to me early (keys & V5 etc) and I acknowledge that for a couple of days it would show up on a HPI as having outstanding finance until I’ve paid BMW Financial Services the 90% and BMW have linked it up with the agreement? I'm obviously going to make the settlement transfer, as otherwise as soon as the seller misses their next monthly then BMW Financial Services would be round to my house to repossess the car (address from the V5 / iDrive tracker).

• Or is the best scenario that I do the transfer on my laptop with the seller watching to see I've done it?

And there's probably more I haven't thought about yet!

Any help and advice appreciated!

For reference I believe BMW Financial Services ‘banking’ occurs at 3.30PM on weekdays.

Edited by Chris.B on Thursday 13th January 13:51

[Piersman2]

The last time I did similar a few years back, I went and sat with the seller whilst we sorted it out.

First off we phoned the finance company, got the confirmed settlement fee, and then I paid the fee directly to the finance company. We waited for them to confirm they had received payment and no longer had any interest in the car.

Then I paid the remainder of purchase price to the seller.

Of course he could have turned round after I'd paid off finance and told me to leave, but he didn't seem the type to pull a stunt like that!

[knitware]

Hello, I received your DM!

I have sold many cars with finance, some with BMW, it's straight forward, instead of cash to the seller it goes to BMW.

The latest car I sold with finance was a LR Defender, finance to clear was over £50k so don't worry too much about the amount but here's how I and the buyer proceeded, some of these things you have already done.

Talk to the seller, ask him to gain a settlement figure, this will have a date, settlement £xxx up until...

Inspect the car, if happy sit in his kitchen with a coffee.

Ask him to call BMW FS (financial services). Use speaker phone.

Pay the settlement using a debit card, there could be a limit on this method so may need to make 2 payments, could be useful to talk to your bank to inform them of the payments.

BMW FS won't care who's card is used for the payment. They will confirm that payment is accepted, the seller can ask BMW on the phone to clarify that the loan is settled.

A letter will be sent some days later, you don't need to wait for this but ask for a copy to be sent to you.

Drive the car home.


Edit. Pay for the car during BMW office hours, they may not be open on Saturday!

[ConnectionError]

I would pay BMW off at the time of collection, and they will confirm payment made.

You have proof of payment.

Pay balance to the seller and off you go.


Or, can the seller pay off the finance early and you pay him?

[EmilA]

I've sold 2 cars with finance on them. Both times the buyer pays the finance company and then remaining balance to me. The finance company also confirm via telephone and e-mail they no longer have an interest in the car.

Just make sure you do it early enough in the day and that the finance company confirm they have received the amount.

[DiscoSINGH]

My reply is not the most helpful but, an expensive car with 90% of the value on outstanding finance? Is the car rare?

With the sort of value/risk involved here can't the same car not be bought as an AUC from BMW? You'll have the assurance of warranty etc if there are issues.

[timbo999]

DiscoSINGH said:

My reply is not the most helpful but, an expensive car with 90% of the value on outstanding finance? Is the car rare?

With the sort of value/risk involved here can't the same car not be bought as an AUC from BMW? You'll have the assurance of warranty etc if there are issues.

Bit of a strange post - who's to say the car doesn't already have a warranty? If its under 3 years old or the current owner has extended it, it will have.

Also, given the vast majority of finance agreements involve a balloon payment, its hardly surprising that the balance left to clear it is a high proportion of the car's value.

[Mark V GTD]

I would echo the advice given by Knitware above. I have done this a few times as seller.

Obviously get an emailed settlement letter from the finance company in advance of the sale. You can then forward this to the buyer so he can see its original and not edited.

As Knitware says you then sit down and call the finance company on speaker phone and go through the settlement procedure but don't do this any later than early afternoon or it will not complete on the same day. The finance company will normally email to confirm settlement is complete and the buyer is free to drive away after completion of DVLA change of keeper formalities.

Also it helps if you are doing all this at the address the car is registered to!

As a side note, the last time I did this I had a keen buyer for the car (Golf GTD Mk.7) but he just could not get his head around the concept that he would effectively be buying the car from VWFS rather than me and eventually pulled out. The actual buyer had no issue with this at all of course and drove away very happy!

[jjr1]

I bought my M4 comp off a girl and gave her 3k and 36k to BMW financial services. Only took a few minutes.

[ZX10R NIN]

Make the transfer on the day you're buying the car, get the finance company to send a confirmation email confirming they no longer have an interest in the vehicle.

Then just pay the owner the existing balance.

[Chris.B]

Thanks all for the helpful replies! Values being mentioned are in the right range.
Question particularly to those that have done it with BMW Financial Services on the phone…

By what method exactly did the payment get made?
The BMW website says:

https://discover.bmw.co.uk/help/finance/how-to-make-payment said:

“Card Payment- This is the quickest way to make an overdue payment – simply call our card payment line via Customer Services. We accept the following credit or debit cards at no additional cost – Solo, Switch, Maestro, Visa Electron, Visa Debit, Visa, MasterCard, American Express. Please note that we do not accept payment by credit card for final payments or settlement.

That’s helpfully contradictory. Do they only accept cards (of any kind) for late payments? Or do they accept credit & debit cards for late payment, but accept debit card only for final settlement?

If the answer turns out to be Bank Transfer only for final payment, not card, is that the online ‘Faster Payments’ system as its majorbank->majorbank I presume?

[h0b0]

Chris.B said:

Thanks all for the helpful replies! Values being mentioned are in the right range.
Question particularly to those that have done it with BMW Financial Services on the phone…

By what method exactly did the payment get made?
The BMW website says:

https://discover.bmw.co.uk/help/finance/how-to-make-payment said:

“Card Payment- This is the quickest way to make an overdue payment – simply call our card payment line via Customer Services. We accept the following credit or debit cards at no additional cost – Solo, Switch, Maestro, Visa Electron, Visa Debit, Visa, MasterCard, American Express. Please note that we do not accept payment by credit card for final payments or settlement.

That’s helpfully contradictory. Do they only accept cards (of any kind) for late payments? Or do they accept credit & debit cards for late payment, but accept debit card only for final settlement?

If the answer turns out to be Bank Transfer only for final payment, not card, is that the online ‘Faster Payments’ system as its majorbank->majorbank I presume?

Sounds like debit cards are accepted for pay off but not credit. It makes sense as there are charges on credit cards they would not be paying on debit cards.

[Pistonheader101]

ask seller to take a loan and clear the finance?

[Dave Hedgehog]

Pistonheader101 said:

ask seller to take a loan and clear the finance?

no way i would sit in some random blokes kitchen whilst he rings his sister up who pretends to be BMW finance and proceeds to empty my bank account for 4 of his mobility housing mates to turn up with pick axe handles and suggest i leave

or to find the cars stolen ...

i would literally die of anxiety

sod that, i'll pay the main dealers 10% premium for peace of mind and protection

[Pistonheader101]

Dave Hedgehog said:

Pistonheader101 said:

ask seller to take a loan and clear the finance?

no way i would sit in some random blokes kitchen whilst he rings his sister up who pretends to be BMW finance and proceeds to empty my bank account for 4 of his mobility housing mates to turn up with pick axe handles and suggest i leave

or to find the cars stolen ...

i would literally die of anxiety

sod that, i'll pay the main dealers 10% premium for peace of mind and protection

lmao

[Monkeylegend]

Dave Hedgehog said:

no way i would sit in some random blokes kitchen whilst he rings his sister up who pretends to be BMW finance and proceeds to empty my bank account for 4 of his mobility housing mates to turn up with pick axe handles and suggest i leave

or to find the cars stolen ...

i would literally die of anxiety

sod that, i'll pay the main dealers 10% premium for peace of mind and protection

The way round that is for OP as the buyer to make the call, but to phone his sister instead, and she can pretend to be BMW finance and say the finance is paid off, then OP gives the seller the 10% balance and drives away with a very cheap car.

This trust thing has to work both ways.

[ZX10R NIN]

Dave Hedgehog said:

no way i would sit in some random blokes kitchen whilst he rings his sister up who pretends to be BMW finance and proceeds to empty my bank account for 4 of his mobility housing mates to turn up with pick axe handles and suggest i leave

or to find the cars stolen ...

i would literally die of anxiety

sod that, i'll pay the main dealers 10% premium for peace of mind and protection

The simple answer to that is that YOU ring the finance company yourself & then you go from there simples

[Jk89]

I’m buying a car in the exact same position as the OP.

Seller has suggested we go into BMW to sort the settlement out.

[Terminator X]

I have always paid off the finance and then paid difference to seller.

TX.

[r3g]

Jk89 said:

I’m buying a car in the exact same position as the OP.

Seller has suggested we go into BMW to sort the settlement out.

Ring the financier number yourself or verify it if he's doing the ringing. It/s a common scam here in BD postcodes to ring a cousin who answers the phone as BMW Financial Services, gives the settlement figure of £££££, you transfer the money, cousin says yes monies received, I'll send you an email confo, bro gives you keys and you drive away happy with your new M3 then once the V5 is registered in your name (or applied for) you have the finance company contracted repo guy turn up on your driveway to lift the car and that's the last you see of both the car and your money. Bro is long gone, obvs.