Seller financing

Tishabet · 09-08-2004, 03:56 PM

Hey guys,
So, like all of you, I'm enthusiastic about Porsches, especially the older ones. However, while I can qualify for a financing deal to buy some 20k honda at the dealership, getting a nice 12k Porsche seems impossible without 12k in cash. Something that I've seen mentioned a few times is that getting traditional bank financing to purchase a 20 year old car is next to impossible, since the blue books might not cover it etc.
So what I'm wondering is whether seller financing is a viable option and, if so, why people don't seem to offer or use it. Like for instance, let's say I see a nice 914 that I really want to buy. Assuming the seller doesn't necessarily need the money right away (as in, they have run out of garage space vs medical bills or something) and they can put a lien on the title, why wouldn't you seller finance? As long as I had some sort of legal documentation so that the seller couldn't take advantage of me, I think I'd rather be paying some amount down and X dollars a month for 5 years or whatever to the previous owner rather than take out a bank loan. Is it that the seller is worried about getting ripped off? Just wanted to discuss this, since I would much rather owner finance my next purchase than buy it outright. Am I just being naive to think that such a situation would work?

Burnin' oil · 09-08-2004, 04:02 PM

The security is the car. What if the motor blows or the car is not maintianed? What if the buyer does not have insurance and wrecks it? There goes the security. What if someone is injured and the seller is considered to be the owner of the car? That's $15k in personal exposure (in CA) right there. Lots of risk with little upside. As a buyer it's great, but good luck finding a non-relative seller willing to finance the sale.

Tishabet · 09-08-2004, 04:09 PM

hmm, fair points. Can't the deal be set up in such a way that the borrower owes X amount of money regardless of what happens to the car? Also, how would the former owner be considered the current owner if the car is financed? I mean, if the honda dealership finances my car, they have a lien on the title but I am still the legal owner and am responsivble for the car. Same goes for if I wreck the car or whetever, right? Can a private party be treated the same way, or is there some sort of legal problem there?

EdT82SC · 09-08-2004, 04:21 PM

Why would some private seller take the chance that you might skip out with the car, and not pay?

Besides, you have other options:

1) Save money every month until you save $12K.
2) Buy from a used car dealer that will finance you.
3) If you own a home get a home equity loan or line of credit.
4) Cash advance on your credit card(s).
5) Rob a bank.
6) Steal the Porsche you want.

I'm sure others can think of other options.

LeeH · 09-08-2004, 04:26 PM

http://www.classiccarfinancial.com/

Icemaster · Icemaster's Garage

If you turn the tables and you were the seller and were approached to finance the deal, what would you say?

Kind of tough thing to do for the average joe. If it were me, I'd either look to an equity line on my house, or pay cash.

How old of a car are you looking at?

TSNAPCRACKLEPOP · TSNAPCRACKLEPOP's Garage

when my patients declare bankruptcy, i get no $ to speak of....

Dantilla · 07:21 PM

A bank spreads it's risk out over hundreds of loans. They can absorb a few bad ones. If your one loan is a bad one.....

Also, The banker is betting with other people's money. He still gets a paycheck at the end of the month no matter how the loans are performing (up to a point, of course).

If someone wants to buy a car from me, and Mr. Banker will not loan him other people's money, why would I loan him my own?

TSNAPCRACKLEPOP · TSNAPCRACKLEPOP's Garage

actually, my 944 was a spoil of a bank loan gone bad!!

morganb · morganb's Garage

From a sellers point of view I would never finance the buyer. Let them organize that side of it themselves.
Although you did not ask this if you need to finance the car would you be better off waiting till you saved enough cash. Once you get it you will spend more than currently on maintenance and rego etc. Maybe better to wait till you have the money up front and then all the better for negotiation as well.

Tishabet · 09-09-2004, 04:56 AM

Fair points all around, I guess there were a lot of contingencies I hadn't considered. FYI, I'm not really looking for a car or anything, my 2.7 944 is the only Porsche I need for the time being, and I don't have any more space between my P-car, my gf's car and my 1938 Buick ongoing restoration. I was mostly asking about the situation out of curiousity.
I've always bought my cars with cash, and I agree that helps for negotiation. Have any of you guys bought a P-car on credit or anything like that? I don't think I would borrow to buy a car, I have enough of them and I'd much rather own outright. Just wondering if anyone here has done it another way.