How does used car financing work?

Life Cars & Motorcycles
1

I’m considering buying a 2015 Toyota VIOS with a five year financing plan. The 2015 VIOS’ are relatively affordable at around 300-350k. I would like to know what happens if I want to sell the car after a year when the financing has yet to be paid off. Can I just use the money from the sale off the car to pay off the remaining amount on the financing, or are there rules about selling cars when the financing hasn’t been paid off yet?

2

You would need to pay off the loan first to sell the car. If the car has a loan you won’t hold the necessary document to sell the vehicle and change to name of new owner. So talk with the finance people who are doing the loan.

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3

If you sell it to a dealer they help to arrange paying out the finance and change the name. You will get a bit less less money for the car but it’s much more convenient.

I did it with my motorcycle a few months ago

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4

Thanks. You bought your car through your LLC right? I am planning to do the same. Is there anything to consider when doing it this way?

5

Yeah I bought a new Ford Wildtrak in August 2015. I could have paid cash but loans were cheap and also wanted more buildup of credit history. So got a 5 year warranty so took a 5 year loan. Borrowed 1.2 million paid NT$22,500 more or less per month. Sales lass at Ford arranged the financing they use their usual brokers.

6

Did they want to see your business revenue or anything like that, or did they just insist that you as an individual act as a guarantor for the loan?

7

No guarantor required. I used my bank PDF statements from my HSBC HK account. They also do not ask for guarantors for foreigners they just ask proof of income / savings. in any case your loan is only for a small amount so I would think getting approval would be easy.

Once you pay your loan you will get calls asking do you want another one.

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8

Thanks for the info.

9

Yeah as mentioned earlier there are generally rules around satisfying the remaining credit on the loan before you part with the car legally. It’s also a big thing in the UK to have a used car checked if it has any remaining credit on it, as if so, it’s still part owned by the credit company, and if whoever is paying the loan stops paying it, then it can still be repossessed, leaving the new buyer with nothing.

Quite the scam, if you think about it.

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