Increase of cars sold fraudulently

The number of cars sold with outstanding finance has risen to one in three from one in four last year, according to new figures from HPI.

HPI calculates that based on the number of finance flags raised in 2017 over 6 million used cars were identified or ‘flagged’ as still having finance owing on them. In the first four months of 2018, 2,437,025 finance hits had been flagged by end of April.

Fraudulent activity only takes place if the vendor tries to sell the vehicle with existing finance still owed, without letting the buyer know.

Due the rise in popularity of PCP agreements over the past few years, more than three-quarters of new car sales to private owners are through finance. There is statistically more chance than ever of buying a vehicle that hasn’t yet been paid for – one in every three HPI checks now highlights that there’s outstanding finance.

Commenting on the increase in used cars being identified as already on finance, Fernando Garcia, head of consumer at HPI said, ‘Buying a car with outstanding finance can land the unwitting buyer in trouble as most finance agreements or loans will grant the lender ownership of the vehicle until the debt has been paid. The debt stays with the vehicle not the borrower. Even if a buyer bought the vehicle in good faith, if the finance hasn’t been settled then the lender could repossess the vehicle, meaning you could lose the car and the money you paid.’