6 Jul 15
News

Beware second hand car finance fraud

There are a number of pitfalls confronting buyers of second hand cars, and which are generally well understood: from the vehicle not being as described (e.g. it might have been stolen, clocked or previously written-off – history which is not disclosed) to con artists obtaining a deposit and then disappearing with the cash.

However, another form of deception is gaining in frequency, as Roger Powell, Head of CDL Vehicle Information Services (My Car Check) points out: the likelihood of falling victim to an outstanding finance issue.

 “There is a serious lack of awareness about the risk of buying a second hand car with second hand debt. We need to get the message out that outstanding finance is now by far the most common pitfall awaiting UK used car buyers. "Certain types of agreements, such as the increasingly popular Personal Contract Purchase (PCP), usually involve the debt being secured against the vehicle, rather than the individual. This means a lot of the cars on our roads actually belong to a finance company, not the people who drive them. Attempting to sell a vehicle owned by a finance company, an activity called sub-hiring, is illegal, but very common. Some sellers do it knowingly. Others wrongly believe that everything will be fine if they keep up the payments. The crux for buyers is that the finance company can be within their rights to seize the vehicle back”.

Authored by: Tim Harrup