Auto advice: Here's how to avoid buying a car that has outstanding finance, says our motoring expert

Published on 2 October, 2022

Overview

What does it mean if there’s outstanding finance on a car?

The car is still under an existing finance agreement and the person selling you the car does not actually own it and therefore does not have the right to sell it to you.

How likely is a car to be offered for sale with outstanding finance?

Over the past number of years, Personal Contract Plans (PCPs) have proved increasingly popular among car buyers. However, for used car buyers, there has been an increase in the number of cars being offered for sale with finance still outstanding. Any car with a finance package such as hire purchase or PCP still belongs to the finance company until the buyer has reached the end of the finance term and paid off all the money owed. Only cars where the finance is a personal loan can legitimately be sold.

What happens if I buy a car with outstanding finance?

If there is still finance owing on a car then it belongs to the finance company and therefore the car could be repossessed by the lender and taken off you.

How can I find out if there is outstanding finance on a car I want to buy?

When buying from a private seller you don’t have the same consumer rights as you do when buying a car from a dealership so it’s very much a case of “buyer beware”. However, it is an offence for a seller to withhold or provide misleading information about the car so with this in mind there are important questions you must ask.

Before you buy, ask the seller if they are the owner of the car and whether there is outstanding finance on the car. Always request the registration documents, these should show whether the car is owned by the seller or a finance company. It’s also worth noting that all Society of Irish Motor Industry (SIMI) dealers have access to a car history check service and cannot sell a car which has outstanding finance on it. For anyone tempted by what appears to be a bargain used car, remember: if something looks too good to be true then it probably is.

Top Tip: A full history check will tell you whether the car has been stolen, has been written off by an insurer, is subject to outstanding finance of if the odometer reading of the car has been tampered with to make the mileage appear lower.

Any questions? Email [email protected]

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