Cars with outstanding finance are more common than you might think. In the UK, around one in every ten cars on the road has some form of outstanding finance. That means that if you’re thinking of buying a used car, there’s a good chance that it could have finance owed on it.
A few different types of finance can be used to purchase a car, and each one comes with its own risks. Hire purchase agreements are one of the UK’s most common types of car finance.
What is Outstanding finance?
Outstanding car finance occurs when the previous owner sells the car but still has to pay off the finance. The fact that there is finance remaining to be paid is a form of fraud by not communicating it.
Buying a used Car with outstanding finance
You have a few options if you find yourself in the unfortunate situation of purchasing a used car with a balance still owed to the lender.
Given that you unknowingly bought the car without being given this information, you could try to argue your case with the lender. It may even be the case that your seller was also incompletely the vehicle by the original seller, depending on how you even came to own the vehicle.
However, if you really want to learn all of this and much more useful information about any used car you’re considering buying, all it takes is a quick car check. In addition to the financial situation, the seller has been up front with you about whether the vehicle has ever been stolen or seriously damaged in an accident.
You will ultimately save money by performing an outstanding finance check in addition to a great deal of time, stress, and effort.
Tips to Avoid Buying a Used Car With Outstanding Finance
As we already mentioned, conducting a vehicle registration check is by far the most reasonable course of action. It’s simple and straightforward to do, and it will quickly show you if the car you want to buy has any outstanding finance on it.
Our car registration check provides you with a thorough report that not only identifies any outstanding debt but also provides a complete vehicle history, including information on the mileage, stolen, write-off and MOT history.
In order to pass off their vehicle as something it is not, dishonest sellers will go to great lengths to hide important information in all of these areas.
If you find out there is unpaid debt on the used car before buying it, you have the option to ask the owner to settle the debt with the lender before you proceed with the transaction. Checking before, rather than after you’ve agreed to the final purchase, makes much more sense from a financial purchase.
How to spot an outstanding finance car?
There are a few key things to look for when trying to spot a car with outstanding finance. Firstly, the risk is a significant factor – if the vehicle is worth more than the amount of money owed, the registered owner of the vehicle / dealer may be reluctant to repossess it.
Secondly, look for signs that the car has been recently purchased – a new registration plate or transfer of ownership paperwork can be a clue. Finally, avoid any deals that seem too good to be true.
If the monthly repayments are significantly lower than the car’s market value, there is likely outstanding finance on the vehicle. Following these simple tips, you can avoid getting caught by an outstanding finance car.
The more information you have, the better, so conduct a car check if you really don’t want to buy a car with unpaid debt.