Automotive

Buying a used car privately that is financed

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  • Jul 6th, 2020 9:02 pm
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[OP]
Deal Addict
Dec 19, 2015
2953 posts
1536 upvotes
Calgary, AB

Buying a used car privately that is financed

There's a vehicle I'm interested in that is a private sale. Currently the vehicle is financed and we would be buying in cash. From what I understand we have two options?

1. Buy the car from the person and hope they pay off the loan on the car... seems a bit sketchy?
2. Take over the finance agreement, with any difference in agreed price paid in cash to us, then we pay off the finance in a lump sum.

The first I'm rather wary of, the second seems a reasonable option if it's a standard car finance agreement with no fees for early payment.

Is this a realistic option, should I be running a mile? There are very few of the vehicle in question available privately, especially of this trim level, or otherwise I wouldn't entertain it.
6 replies
Deal Addict
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Feb 17, 2015
1145 posts
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90.00° N, 135.00° W
Just curious, what kind of car is this? Why go through the hassle of buying this car?
[OP]
Deal Addict
Dec 19, 2015
2953 posts
1536 upvotes
Calgary, AB
CuriousJack wrote: Just curious, what kind of car is this? Why go through the hassle of buying this car?
Nothing special, but there are only two of the trim I’m after available privately, the other being a rebuild..

If I’m dealing with liens I’d also expect to factor that into the price, although I suspect that probably won’t happen considering the listing price.
Member
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Oct 29, 2012
252 posts
153 upvotes
Oakville Honda
These are hard. I would personally avoid #1. #2 would be the option of choice but just know that you will have to pay the tax on top of the assumption as it’s still a car sale.
[OP]
Deal Addict
Dec 19, 2015
2953 posts
1536 upvotes
Calgary, AB
RFDBRIAN wrote: These are hard. I would personally avoid #1. #2 would be the option of choice but just know that you will have to pay the tax on top of the assumption as it’s still a car sale.
No sales tax on private sales in Alberta. Presumably that would be the same in this situation as it’s still a private sale?
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Oct 29, 2012
252 posts
153 upvotes
Oakville Honda
Andy34 wrote: No sales tax on private sales in Alberta. Presumably that would be the same in this situation as it’s still a private sale?
Ahhh yes then you’ll be fine. I’m speaking as if it were a transaction in Ontario.
Deal Addict
Nov 16, 2011
1509 posts
1224 upvotes
HAMILTON
I was confident of a seller's identity ( been to house, knew where car certified ) so told him to get a letter from the financial institution that car was paid off. Also had him provide me with the phone number of the bank representative and ensure they were ok if I called to confirm the letter. Looked up the financial institution on line and was able to get a phone list which confirmed the person. Called number in phone book, got the person on line and confirmed the payout.

Carried on with buying the car. Was fast, easy and went well.

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