How to avoid buying a car with outstanding finance

Secure your used car purchase by avoiding outstanding finance with our reliable history checker. Don't fall victim to potential scams and issues that can come with purchasing a used car. Conduct a thorough inspection to ensure your safety and the legality of the vehicle. Look out for dangerous faults, theft records, and unpaid finance, and let us guide you with essential information on how to identify outstanding finance and what to do if you've unknowingly purchased a car with unpaid debts.

RAC has put together an insightful article, listing everything you need to know in order to not get caught in the trap of outstanding finance on previously owned vehicles.

Contents:

What is outstanding finance?

Outstanding finance is a common issue that many car buyers encounter when purchasing a used vehicle. It occurs when the previous owner still has finance to pay on the car, but sells it anyway. This means that the car technically still belongs to the finance company until the debt is fully paid off.

Unfortunately, some unscrupulous sellers choose to fraudulently sell the car to the next person without declaring the outstanding finance in any records or communications. This can leave the unsuspecting buyer with a nasty surprise down the line, as they could end up having the car repossessed or facing other legal consequences.

To avoid falling victim to outstanding finance, it's important to do your due diligence before buying a used car. This includes checking the car's history using tools such as a HPI Check or the DVLA's online service, which can reveal any outstanding finance or other issues with the car's past.

Additionally, it's always a good idea to ask the seller directly if there is any outstanding finance on the car, and to get this in writing if possible. If you're unsure about anything, don't be afraid to seek professional advice from a qualified mechanic or legal expert.

By taking these steps, you can help ensure that you're not caught out by outstanding finance when buying a used car, and can enjoy your new ride with peace of mind.

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How to tell if there is outstanding finance on a car?

Enhance your chances of buying a reliable used car by conducting an outstanding finance check on the vehicle. As well as discovering any outstanding finance. This check can reveal critical information such as previous accidents, whether it has been stolen and insight into past MOT's

When purchasing a used car from a dealership, you can inquire whether they have already conducted outstanding finance checks. For peace of mind, we recommend performing your own check using our RAC Vehicle History Check. Our comprehensive check provides an extensive vehicle history report, which can help you avoid purchasing a car with outstanding finance obligations or other potential issues.

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What to do if there is outstanding finance on a car

Before buying a car:

• If you discover outstanding finance and you have not yet purchased the car, you should check with the listed finance company to understand whether the account has been settled or if payments are due. If money is still owed you should ask the owner to settle the account before continuing with the sale.

After buying a car:

• If you discover that there is outstanding finance owed after buying the car, it will be more difficult to prove you have a legal right to owning the vehicle. You will have to convince the finance company you are an ‘innocent buyer’ which can be difficult. If unsuccessful, they can take back the car.

Getting a car check is quick to do online with the RAC Vehicle History Check – just provide a few details about the car you plan to buy.

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