Finder is committed to editorial independence. While we receive compensation when you click links to partners, they do not influence our content.
How do you buy a car that’s still under finance?
What to do when your dream car has a loan on it.
What does it mean when a car is under finance?
If a car is under finance it means that the current owner hasn’t completely paid off a secured car loan. Secured car loans use the car as collateral in case the borrower defaults on the loan. If a borrower misses a payment, the bank will repossess the car.
Cars purchased with unsecured loans, credit cards or cash are not under finance because the buyer has paid for the car with their own money or with a loan that they’re personally held accountable for.
Compare loans for a car under finance
Why is it hard to buy a car with a loan on it?
It can be hard to buy a car with a loan on it because the loan is attached to the car, not the owner. In other words, whoever owns the car is responsible for paying off the loan.
If the seller doesn’t pay back the loan, then the buyer could be in for a nasty surprise. To make sure you’re not taking on a debt-riddled car, you need to take some extra steps to buying a car with a clear title.
How can I buy a car with a loan on it?
Creating an open, honest environment is key to buying a car under finance. Here are some steps to take before buying a car under finance
Should I buy a car that’s under financing?
There’s nothing wrong with buying a financed car, but the responsibility is on you to make sure that the car will have a clean title when all is said and done with the sale. If you find the right car, don’t be put off by existing finance — just make sure everything is out in the open.
Dealers are required to prove cars aren’t under any sort of financing, however, private sellers aren’t subject to the same regulations.
It’s possible to buy a car that the owner hasn’t already paid off yet. But you’ll need to make sure that you aren’t signing up for more debt than you bargained for by making sure the title is free.
Not worth the effort? Check out our car loans page to learn about your other financing options.
Frequently asked questions
Image source: Shutterstock
More guides on Finder
How to get rid of Private Mortgage Insurance (PMI)
Smart strategies that homeowners can use to get rid of Private Mortgage Insurance (PMI).
How to separate your finances during divorce
Ways to protect your assets and what you need to know about marital debt.
Is now a good time to buy a car? 5 ways COVID-19 may have helped you
Navigate car deals and a wavering market if you’re buying a ride during the coronavirus.
How to get a divorce without a lawyer
It’s possible to consciously uncouple without the hefty attorney fees, but it takes some preparation on your part.
What cars are made in America?
Check out the top 50 American car models, and find out what makes them American.
Sites that sell secondhand clothing
From offering discounted designer brands to one-of-a-kind vintage apparel, secondhand clothing sites create the ultimate online shopping experience — and help the planet.
How much does a divorce cost?
Depending on whether you go the DIY route or hire lawyers, it may cost you a few hundred to thousands of dollars.
How much will I get from disability insurance?
Disability insurance typically pays out between 40% and 80% of your income, but will depend on the type of policy you have.
Heacock Classic car insurance review January 2021
Insure your classic car or race car at agreed value with Heacock Classic, but you’ll have to look elsewhere if you have recent claims or major violations.
How much disability insurance do I need?
You won’t be able to replace all of your income with disability insurance, but you can buy enough to cover your biggest monthly bills.
Ask an Expert