Car loans: it pays to check

By Matthew Plant

If you're buying a used car on finance, you might think your own loan is the only one you have to think about. In the vast majority of cases, that's true - but it pays to check.

The Finance & Leasing Association (the motor finance industry's trade association) is stressing the importance of looking into the vehicle's history to make sure any loans on the vehicle have been repaid in full. Last year, cars were fraudulently sold with finance of more than £13 million still outstanding.

So someone buying a second-hand car could actually become the victim of this kind of fraud - and risk having the vehicle repossessed by the finance company which still owns it, in which case they'd lose both money and vehicle.

Checking it out isn't difficult. A comprehensive car history check will show you all you need to know about the car and its previous ownership. It'll show if there's any finance outstanding on it, as well as whether it's ever been stolen, scrapped, involved in an accident or had its mileage adjusted. So it's easy to see the value of checking: click here to visit the FLA site for some further details and a few tips on buying second-hand vehicles.

"It's important to do a history check when buying a used car," said Paul Harrison, the FLA's head of motor finance. "Checks are available for a fraction of the total cost of a car, and provide reassurance that the car is what the seller says it is. It's better to do the checks than risk driving an unsafe car, or a car that remains the property of a finance company - which they'll want back."

Last year, FLA members provided almost £20 billion of car loans and motor finance.

Image © iStockPhotos / Courtney Keating

Tags: loan, loans, car loans, car finance, finance, FLA, 2021, 2011, stolen, unsafe. problems, checklist, used cars

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