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If your car finance deal is not paid off in full, the car is not yours to sell

18th December 2012 Print

The latest quarterly figures from the Finance & Leasing Association (FLA) on motor finance fraud show that the most common and growing type of fraud is conversion - where the customer sells the car on even though it is owned by a lender and has outstanding finance.

In tough economic conditions, some customers resort to selling the car because they need cash for an emergency, but then do not fulfil their responsibilities and repay their loan in full. Many consumers do not know that, until the loan is paid off in full, the car is not theirs to sell and if they do sell it, they are committing fraud.

Nevertheless, fraud is falling. 747 cases were recorded in the last 12 months, an 11% reduction on the previous year, representing a very small proportion of the total number of motor finance agreements taken out.

Paul Harrison, Head of Motor Finance at the FLA, said: "A finance company remains the owner of car until the final repayment is made. Any breach of contract - such as selling the car to someone else - could result in a case being referred to the national AVCIS Vehicle Fraud Unit for investigation.

"The good news is that the reduction in fraud cases during the past 12 months means that fraud only affects a very small proportion of total motor finance agreements. This demonstrates that the work of the FLA's members in combatting fraud is paying dividends."

For more information, visit fla.org.uk.