Used car over credit is defined as the process of taking over the payment of used car payments that have not been paid in full from someone else.
This generally happens because the owner of the first car is unable to pay off the rest of the installments, thus transferring the responsibility to someone else. Automatically, ownership of the car was also transferred.
Car loan agreement
This agreement was agreed by both parties marked by the person who took over, will provide compensation money to the first owner. The compensation is considered as compensation for greater expenses after transferring ownership of the vehicle to someone else.
After the vehicle is taken over, then the payment of the remaining principal installment becomes the obligation of the second buyer or the person who takes over the used car loan.
Over used car loans are sometimes used by some people who fail to meet the requirements of buying a car on credit. This method can be done without the knowledge of creditors to avoid checking financial capabilities. This term is known to the public by the term over credit under the hand.
However, there are also those who use it to get a used car with a lower DP. This method can be done by submitting an application for over credit to a financial institution or bank.
Simulation Table of Used Car Loans
|The price of the car is $ 100 million||First Debtor||Second Debtor|
|DP 30%||USD 30 million||Pay compensation according to the agreement to the first debtor|
The table provides an overview of the transfer of installments from the first debtor to the second debtor. The second debtor no longer needs to pay the down payment according to bank or leasing requirements, but only needs to pay compensation that is determined or agreed upon with the first debtor.
How To Over Used Car Loans So As Not To Break The Law
There are several ways to over- use used car loans . The following are the steps you need to take to avoid violating the law.
- Understand the rules legally and legally.
- Only do it with the knowledge of an official financial institution, namely a leasing or a bank.
- Don’t over credit without the creditors knowing.
- Make sure that the first owner is not in debt.
- Meet all the required documents requested by the leasing or bank.
- Make expenditure plans to avoid losses.
Strengths and Weaknesses of Used Car Loans
Over used car loans should be beneficial for car owners, but there are also those who are forced to sell it cheaply just to cover the DP losses that have been deposited to creditors.
Conditions like this usually occur because car owners are no longer able to continue repayments. Instead of being confiscated by creditors, it is better to divert installments to others in the hope that they can help reduce the losses incurred.
Generally, if the debtor fails to pay the installments, the car will be withdrawn or confiscated by the creditor. That way the debtor will not get any compensation. Another case if through over credit , at least the car owner can still reduce the losses received.
However, not all of these conditions can be beaten flat. There are also car owners who do over credit with the intention of replacing a better car or choosing a car with lighter installments. So, the reasons can vary.
Over credit is considered as a solution to get used cars at low prices
Because the buyer only needs to pay off the remaining principal credit and pay a DP that is not too large. Conversely, buyers must also be careful and vigilant with offers of over credit at unreasonable prices. It could be done by the car owner because there is a problem. Therefore, both the seller and buyer must be transparent about the condition of the car and the payment that has already passed.
As a closing tip, it never hurts to research the price of a used car that you want to buy or sell first. That way you can get a more competitive price range.