For car buyers who are in the market for slightly used vehicles, there's a modus operandi going on that you should be aware of.
“Assume Balance” otherwise known as Pasalo, is usually done when encumbered vehicles are being sold while still in the middle of a car loan from a bank or a manufacturer's in-house financing services. Buyers of these vehicles take over the auto loan, paying the remaining balance based on the terms of the scheme.
This effectively enables car buyers to get an attractive deal into getting a relatively new-ish vehicle at a lower price. And while it's becoming a common sight in online marketplaces, the Philippine National Police – Highway Patrol Group (PNP-HPG) is warning the public of the “Pasalo-Benta-Bawi” scam.
According to PNP-HPG, what these people do is they would place GPS devices on the vehicles they're planning to sell. The syndicate usually targets casino-goers who would be offered pre-owned cars through an assume balance scheme. Once the vehicle ends up with an innocent victim after a few months, the scammers posting as the “original owners” of the car would then report to the police that they were a victim of this scam.
Of course, the police would easily locate the vehicle based on the GPS device and take it away from the innocent buyer. And since the syndicate is the so-called “original owners”, the car would be returned to them where they can target another victim.
Assume balance is basically an illegal practice to begin with as auto loans are technically not "assumable" or transferable. To avoid being subject to possible legal action, it might be best double check your finances first before going ahead with that attractive deal on your next car purchase.