The latest survey from vehicle history check expert, HPI, reveals that a staggering 42% of used car buyers don’t know who legally owns a car that has finance owing on it.
The truth is that a vehicle with outstanding finance belongs to the finance house, which has the legal right to repossess that vehicle at anytime, without warning; 1 in 4 cars checked by HPI are subject to outstanding finance.
Nearly a quarter of those surveyed (23%) assumed the car belongs to the person named on the vehicle’s Log Book, highlighting the extent of misconception amongst consumers. The good news for consumers buying from a dealer is that, if they later discover the vehicle is on finance and repossessed, they will be protected by Innocent Purchaser Protection (IPP) and will be able to get back their money and buy another car.
Neil Hodson, Managing Director for HPI explains: “If a consumer buys a car from a dealer that later turns out to be on outstanding finance, IPP gives them a solution to the problem. The buyer simply needs to contact the finance company and explain that they are an ‘innocent purchaser’ and be able to provide evidence that they purchased the vehicle from a dealer, in goodwill. However, if a consumer buys a car privately, the story is sadly very different; the buyer stands to lose both the car and the money they paid for it. The best form of protection for these car buyers is to conduct a vehicle history check which not only includes an outstanding finance check as standard, but which is backed by a Guarantee.”
In HPI’s survey, 69% of respondents knew who owned a vehicle still on outstanding finance when given the answer as part of a multiple choice question. However, this still leaves almost a third of consumers in the dark, 12% of which believed the car belonged to the person on the Log Book, even if they had handed the cash to someone else and 9% believed the opposite. 7% thought the car belonged to the police and 3% expected it to belong to them.
HPI holds details of over 7 million live finance interests, which represents in excess of 98% of the UK’s motor finance market. Its award winning HPI Check® draws upon this information to confirm to used car buyers if a vehicle has outstanding finance against it.
HPI will also identify if the vehicle has a discrepant mileage; its National Mileage Register holds over 200 million mileage readings. HPI also confirms whether a vehicle is currently recorded as stolen with the police or has been written off, making it the best way for consumers to protect themselves from fraudsters looking to make a fast profit. In addition, the HPI Check offers a £30,000 Guarantee in the event of the information it provides being inaccurate, offering added financial peace of mind to used car buyers.
Neil Hodson concludes, “It’s easy to think it won’t happen to you, but our survey shows that many buyers are woefully misinformed on their legal rights. Never accept a seller or purchaser receipt as proof that the vehicle is clear of finance, as this won’t stop a finance company reclaiming it from you. If you discover when buying the car that it has finance owing, raise two bank drafts, one in the name of the finance company for the outstanding amount of the loan and one for the seller for the remainder. But the best form of protection is to conduct a vehicle history check, such as the HPI Check, BEFORE you buy.”