Question about finance/car loans and buying a new car

[seedywagon]

Hi Guys,
I'm a total dufas when it comes to finance and loans and such, I got my Mum to do it all for me. With my current car, I borrowed roughly 11k to purchase the vehicle, I've paid off roughly 7-8k of this, I'm now looking to purchase another vehicle for around 18k.
I intend on paying 3.5k cash up front....

How does this work? Whats the easiest way of buying a new car when you're still paying off the first?

[dags41v]

Pay out the old loan and start again with the new car or will have to list the other loan as a current debt and they will consider your repayments and ability to repay the new loan against your current income.

[XR6_661]

Unless you get an unsecured personal loan to pay out remainder of old loan + cost of new car.

[seedywagon]

I'm in the interesting situation where what I borrowed is the same/less than what my car is worth as a private sale (borrowed 11, could get 12-13k for it) So you think I should just sell my car, pay off what I owe and just apply again?

[302 XC]

Depending how and what your current financier says as to what you can or cant do with your loan/car
Most cars under finance cannot be released until they are paid in full
If doin a trade for a new car,the difference between what you owe and what they give you as a trade will be added to the new car some how
IE
IF you owe 11K and the trade in value is 8K , the balance of 3 K is added to the new car
What your car is worth and what you actually get for it as a private sale/trade is two completely different things

[BENT_8]

Well if you only owe 3-4K on the car, either sell it privately or trade it in and use some of your deposit to finalise the loan.
Then use the balance of your deposit on the new car.

[GT]

The process will depend on whether you are selling/buying privately etc.

Is your current loan a Consumer Car Loan or a Personal Loan? If it is a CCL then the current car will have an endorsement and be unable to be released until loan is paid out (Motor Reg has these in their systems). Regardless of this you will need to pay out the current loan:

1. if a CCL, it needs to be paid out in full before it can be transferred to a new owner. You then get a new loan for the new car.

2. if a Personal Loan, you have no obligation to pay it out, as the car was not security but the Financier will then count the current PL as a debt and this will reduce your capacity to borrow for the new one.

Your current Finance Coy will probably give you another loan and they refer to this as 'replacement commitment' - as long as you have capacity, good credit history and have been in your current job of for a length of time.

It is harder to get money and they are very thorough unlike days gone past. In essence, you will need to pay out the current loan at point of private sale. If the car was traded the Dealer pays it out for you and it is a very easy process for you but at a greater cost.

NOTE! If you have had a dramatic change in circumstances (ie been in a new job a couple of months) do NOT sell your current car as you will not get a loan. I had someone come and see me for advice and I gave them this information. They could not get another loan as they hadn't been in their job long enough and fortunately had not yet sold the current car. Be sure you are going to get a new loan before you sell yours and pay out the current one.

Hope this helps.

Cheers
Gaela

[vztrt]

Originally Posted by Mr Hardware

News just in: BA XT's have just doubled in price

His is manual, so it can command a higher price.



Carsales

[seedywagon]

Originally Posted by Mr Hardware

News just in: BA XT's have just doubled in price

It's a manual, 12k is the going price - check it out for yourself, I'm not an idiot.

Also, it is a CCL.
So what you're saying is, I cannot sell it and use the money I get to pay the remaining balance? It seems so much easier to buy from a dealer in this situation. I really don't know what the payout figure is on my car, I should be finding this out first I should think.

[russellw]

As far as I am aware, the OP didn't ask for advice on the value of his car so can we keep the discussion on topic.

Russ

[GT]

Originally Posted by seedywagon

Also, it is a CCL.
So what you're saying is, I cannot sell it and use the money I get to pay the remaining balance? It seems so much easier to buy from a dealer in this situation. I really don't know what the payout figure is on my car, I should be finding this out first I should think.

I am saying you CAN pay out the balance.

The best way to do this in a private sale is for the Finance Company to give you a written balance for the car for the day it is being collected by the purchaser, as it changes every day.
You go to the Bank (the one the Finance Company uses) with the Purchaser and pay out the balance and he/she gives you the balance of this in either Bank Cheque or cash. DO NOT ACCEPT A PERSONAL CHEQUE!!!
This process ensures the purchaser is happy the car has no balance remaining. The Finance Company can be requested to remove the security from the car asap (some drag their heels with this) but at least they have the security that you have definitely paid and the car is free from debt.

Just keep asking if you have any other questions.

Cheers
Gaela

[seedywagon]

Originally Posted by GT

Hope this helps.

Cheers
Gaela

It does, thank-you very much!
I think I'm best to first find out how much I owe on my current car, as I've mentioned earlier, and just work my butt off to pay off the remaining amount. Alternatively go to a dealer, which despite the annoying salespeople and dishonesty, is a lot easier than buying privately (Yes, I am aware that you've worked at a dealership before :p)
But thanks anyway, it's cleared up a lot!

[GT]

Originally Posted by seedywagon

Alternatively go to a dealer, which despite the annoying salespeople and dishonesty, is a lot easier than buying privately (Yes, I am aware that you've worked at a dealership before :p)
But thanks anyway, it's cleared up a lot!

I agree - I could write a book about some of the appalling things that go on in a Dealership and great Salespeople are few and far between. :(
You could buy from a Car Yard and the upside with this is the Statutory Warranty. Some good buys Privately and as long as you get the car looked at by someone who knows what they are doing, it is a great way to go. The other big thing is to do a Revs check before you pay for it to make sure it is paid out by the current or previous owners.

Good Luck and PM me if there is ever anything you would like to know/help with.

Cheers
Gaela

[IWANTANF6]

First, u have to call your finance company and ask for payout figure on the car. Most ccl are fixed interest. You said you borrowed 11k but you must add interest and fees which u still have to pay even if you sell the car earlier.

[gcg2503]

To check if the vehicle has been stolen, written off or is encumbered perform the follwoing:

Since you are in victoria enter the vehicle registration details and it will return the VIN and whether it is encumbered, stoen etc etc

http://www.vehiclestatuscheck.vicroads.vic.gov.au/

Click I have understood the conditions box and hit enter

Enter VIN or registration

http://www.vehiclestatuscheck.vicroa...icleInput.aspx

The site will return the vehicle details...

Vehicle Registration: GCG
VIN/Chassis Number: 6FPAAAJGSW9M42255
Engine Number: JGSW9M42255
Vehicle Make: FORD
Vehicle Colour: GREY
Body Type: SEDAN
Year of Manufacture: 2009

Then words in the box below and it will return all the relevant details

Vehicle Status Checks : Results 21/2/2011


Vehicle Registration: GCG
Registration Status: CURRENT UNTIL 14/04/2011
VIN/Chassis Number: 6FPAAAJGSW9M42255
Written-Off Status: NOT-WRITTEN-OFF
Engine Number: JGSW9M42255
Encumbrance Status: NO-ENCUMBRANCE
Vehicle Make: FORD
Stolen Status: NOT-STOLEN
Vehicle Colour: GREY
Body Type: SEDAN
Year of Manufacture: 2009