Car buyers warned of outstanding finance trap
Nov 22, 2006
While being sold a stolen car is a big worry among consumers planning a second-hand car purchase, they are forgetting about an even bigger risk, it has been claimed.
Credit reference agency Experian said that car buyers were not thinking about the biggest threat of buying a car whose finance has not been paid off and therefore still belongs to the finance company.
If a loan or hire purchase is outstanding on a car that has just been bought, the finance company retains legal interest until the loan is repaid in full and the car could be repossessed, Experian said.
While many buyers believe that as an innocent buyer they would be able to keep the car, they face the task of convincing the finance company that they are an innocent buyer, which can be a difficult process, the firm advised.
The managing director of Experian's automotive division said that while checking that a second-hand car was not stolen was important for buyers, statistically car buyers faced a bigger threat of ending up with a car with outstanding finance.
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