Outstanding finance not given the credit it deserves
17 November 2006
Outstanding finance is the biggest risk facing used car buyers, yet according to the results of a survey of over 1,500 consumers, a big concern when researching their next purchase is to ensure that they don’t end up with a stolen car.
This is particularly true among those who have bought a used car in the past three years.
However, Experian, the global information solutions company, warns that while used car buyers are busy checking out the stolen status of a car, they may face an even bigger risk of getting stung by fraudsters trying to sell them a car with finance still outstanding on it.
In the survey conducted by Canvasse Opinion from Experian, 72.2 per cent said that it was very important when checking the history of a vehicle to find out if the car they were hoping to buy could have been stolen. Buying a stolen car is a risk, but according to Experian, the biggest threat to used car buyers is the risk of ending up with a car whose finance has not been paid off and therefore still belongs to the finance company.
Last year over 3.6 million new motor finance agreements were taken out and a further 2.8 million were taken out up to the end of September this year.
Rob Whalley, Managing Director of Experian’s Automotive division, said: “Checking that the car you are about to buy is not stolen car is very important, but statistically, car buyers face a greater threat of ending up with a car that still has finance outstanding on it, as fraudsters attempt to sell them on without settling the bill.
“Additionally, not enough car buyers are aware of what may happen if they do end up with a car that still has finance outstanding on it. If a loan or hire purchase agreement is still outstanding on a car that has just been bought, the finance company will retain a legal interest in the vehicle until the loan is repaid in full. If the loan is not repaid, the car could be repossessed.
“The mistake that a lot of car buyers make is to believe that as an innocent purchaser, they would easily retain ownership of a vehicle in this situation. However, they would have to prove that they really are an innocent purchaser to the finance company which, in practice, can be an extremely difficult and lengthy process.”
AutoCheck, a vehicle history check from Experian, enables car buyers to be aware of the full financial history of a used car. Any given vehicle has 23 possible pieces of information asscociated with it that could affect the sale of a car, such as whether it has be stolen, written off, had a plate change, colour change or keeper change and any adverse mileage information.
Rob continued: “Through AutoCheck, we have found that around 30 per cent of all the cars we have checked still have finance on them. This does not necessarily mean that every single one of those cars was sold fraudulently, but it does highlight the extent of the issue and the fact that it is better to be safe than sorry and ensure that the previous owner pays off any finance agreement in full before ownership passes hands.
However, car buyers also need to be aware that not all vehicle history providers actually have this kind of finance information.
“Experian’s Automotive division has been working closely with finance companies for over ten years and has one of the most comprehensive databases of finance agreements. As a result, AutoCheck from Experian is one of the few vehicle history providers in the UK to incorporate finance information as part of a standard vehicle history check.”
