Car Installments take over-the risks???

[LivingCreations]

I WANT A CAR BY TAKING OVER SOMEONE'S CAR INSTALLMENTS. I DONT UNDERSTAND HOW THE SYSTEM WORKS?

WHAT ARE THE RISKS ASSOCIATED WITH BUYING A CAR THIS WAY. CAN I BE CHEATED OF MY CAR AFTER PAYING OFF THE CAR?
DOES THE BANK HAVE TO KNOW OF THE TRANSACTION & DO THEY HAVE TO APPROVE IT?

SECONDLY,IF IM TO TAKE OVER A R3000/MTH INSTALMENT HOW MUCH DO I HAVE TO PAY UPFRONT(CASH)?

WHATS IN IT FOR THE PERSON WHOSE INSTALMENTS IM TAKING OVER SINCE THEY HAVE BEEN PAYING FOR THE CAR FOR A COUPLE OF MONTHS, OR DO THEY JUS LOSE OUT ON THAT?

 

[Fazda]

Theoretically the old owner loses out, and he is the one at risk, as the car is still in his name, if you default on payment. The whole thing is illegal, but is often done, but usually between people who know each-other very well.

the bank would freak if they knew about it, and you could end up losing the car if they find out. All that being said, I have done it with 3 cars, to the same guy, who was a bad credit risk, but who knew that I would take out his knee caps if he defaulted...not a great experience and not recommended!

 

[ALFAHOLIC]

Basically person A cannot afford the car for whatever reason, person B(you) can afford the car but have a bad credit record - so the 2 of you strike a deal, the car is still in person A's name, but person B, or you, will now pay the monthly installments untill the car is paid off, then you guys can proceed LEGALLY to put the car in your name.

This IS illegal.
9/10 something goes wrong with payments or the relationship turns sour and people want their car back.
I'm not sure you can even turn to a contract for security becuase who'd want to contract illegal activity.
The person you taking the payments from must be trustworthy and know you for a long time, same with you, you must be trusted to be able to make the payments - this is seldom the case though.

 

[Gaz{M}]

Secondly, don't write in ALL CAPS. If you have used the internet at all in the last 5 years you would know that is considered rude.

Thirdly, this is a horrible, horrible idea. I would recommend you find another way to obtain a car legally.

 

[rurapente]

A vehicle that is under installment is ceded to the bank or financial institution that paid for it.

This means;

1. You CANNOT transfer the payments to the responsibility of another person, with or without permission from the bank.

2. You may not re-lease as in re-hire the car to another person, which is in effect what they're doing unless it was financed as a business vehicle from a company that does leasing.

3. This means you cannot get legal documents to do this, since the vehicle is not owned by the other person, its owned by the bank - so whatever documents they come up with are not valid anyway.

4. You could probably get away with depositing funds into the person's account, and using the vehicle. But remember this, You pay for it for 10 months, the person (or bank) says give it back! - as per law, and police - you have to return it or you've stolen it.

So, as repeated here, and now again - BAD IDEA.

[EDIT] - I just wanted to add, some family members do this, for example dad buys car, kid pays dad back every month. Either way the vehicle is still owned by the dad. The kid doesnt mind since he's a kid. In your case the car would still be in the name of the other person even though you're paying for it so its just silly - you're paying for something you dont own, just go buy one? Remember too the person cannot transfer the name to you, since as mentioned above its ceded to the bank.

 

[USZA]

From personal experience:

Please do not do this. I have been burnt at both ends of such a deal; trying to sell a car to someone in that way, and them not paying the instalments, and most recently, took over a family member's car, which he then wanted back after 8 months, leaving me out of pocket with R24 000. In both cases, I dealt with integrity with the parties concerned; some people however, have no integrity though.

There's just too much that could go wrong in such a deal; you don't want that burden/worry for the next few years while paying the car off. My worst fears came true when it happened to me - not nice.

Today however, I'm driving a car financed by the bank, registered to me; no third party to worry about and I have total control as to whether it will be mine once it's been settled - no worries of a 3rd party screwing me.

 

[JungleBoy]

I did that with my first car. I gave it to my brother in law to carry on with the installment. Car got paid up and I received the Natis ceritficate and only then we changed ownership to his name.

The deal was that he didn't own the car until it was paid up. I reserved the right to repossess the car had he defaulted. Technically, this arrangement is not illegal as long as you both understand that the original owner of the car remains responsible for payment until it's paid up.

 

[USZA]

Technically, this arrangement is not illegal as long as you both understand that the original owner of the car remains responsible for payment until it's paid up.

Technically, this type of arrangement IS illegal because you are not the titleholder of the car; only the registered owner. It's tantamount to you leasing/hiring out someone else's asset - in this case, the finance company's.

You would also be in breach of your credit agreement, as stated earlier in this thread. But, since the banks are not too strict on breaches like this, the only way to remedy it would be to take the car back, and continue paying it yourself.

 

[ToxicBunny]

If you have a financed vehicle, you are not allowed to outsource the payments from my understanding....

Plus, my guess is that the banks would take a horribly dim view of a person on their credit rating if they did "outsource" the payments on the vehicle.

 

[Hemi300c]

Yip you are contracted in and no contract can be amended to include a TP without the consent of all parties. Also in terms of the new credit act they will need to OK the new TP.

 

[tRoN]

Maybe I'm missing something here, but why cant u just legally purchase the car from him and finance it on your name.
I didn't read anywhere in your OP that YOU are a bad credit risk and unable to source your own finance for the vehicle.

 

[MFour]

Maybe I'm missing something here, but why cant u just legally purchase the car from him and finance it on your name.
I didn't read anywhere in your OP that YOU are a bad credit risk and unable to source your own finance for the vehicle.

What I was thinking. In days past you could not really do it and arrange financing other than organising it through some dealership. Fortunately things have changed and you can now actually approach the a bank, tell them you want to finance a private deal and they will make the arrangements for you. It will still have to go through a dealership (and some fees payable) which the bank will advise you on. Alternatively there are a few car finance houses who will gladly finance a private deal for you, pending the relevant particulars.

However, if the original owner still owes too more than the car is worth, obviously he/she will have to come up with the difference before the bank will release the title. You could possibly help out there by paying some form of deposit on the vehicle. In short, rather refinance in your own name, far safer in the end.