Vehicle finance fraud on the up
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 automotive data experts HPI.
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.”
In 2017, the percentage of 4 × 4s hpi flagged as having outstanding finance was 41.8%, campers (48.5%), coupes (43.3%), executive cars (40.5%), luxury cars (31%), performance cars/hot hatches (48.6%), supercars (40.9%), MPVs (33%), taxis (27.2%), tractors (30%) and vans (29.5%).
Fernando Garcia added: “The first thing any used car buyer must do is ascertain whether the potential purchase is actually paid for. It’s impossible to tell if a vehicle has outstanding finance just by looking at it, which makes a vehicle history check an even more vital form of protection for buyers. An HPI Check can help protect consumers from buying a vehicle with something to hide, saving them cash as well as keeping them safe.
“Comprehensive, accurate and up-to-date car check data with a £30,000 data guarantee, the HPI Check gives protection from buying a vehicle with outstanding debt such as logbook loans and car finance plus is the first line of defence against car scams and motor fraud, including stolen, cloned and clocked cars.
Throughout 2018 automotive data and valuations expert HPI is celebrating the 80th anniversary since the world’s first vehicle history checker was introduced.
Since the launch of the original HPI Check in 1938 the automotive sector has witnessed dynamic change and in the eight decades since its introduction, HPI Check established itself as a market leading tool trusted by millions of UK motorists.