Does the bank own your car?
- 21 September 2010
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Last nights consumer show was interesting for the outstanding finance piece that was covered. There are so many cars out there that have finance on them I would be worried about buying any car without checking it’s history. If you’re a regular reader here you will know that I’m always banging on about doing a full history check on any car you’re about to buy, not just for finance but service and write off status.
There are two cases that I know of where there are repossession orders on cars that have outstanding finance. In one of those cases the current owner bought the car over twelve months ago in a private deal and has subsequently found out that the car has outstanding finance from two owners ago, now the car is the bone of contention. They bought it in good faith from an owner who owed nothing on it, the owner before his owed thousands on the car, I wouldn’t like to be the one to sort out that mess. The debt however is still on the car, now that the debt has been sold on either the car goes to service the debt or someone has to pay the loan off. The last owner is always the looser in these cases as there’s no getting a refund on the purchase, so the car goes as does anything spent on the car.
In a recent survey our friends at www.motorcheck.ie found that out of 100 cars 7 of them had finance outstanding.
It breaks down like this:
It found that of the 100 examined;
– 30% of the sample turned up positive for finance on the official records of the Irish Credit Bureau
– 21% of the sample were confirmed to have been on finance on the day they were advertised (verified by bank named on the record)
– 14% of the sample still have finance outstanding today (verified by the bank named on the record)
Of the 14% that were confirmed to be on finance;
– 2 were advertised by private sellers
– 5 were advertised by a member of the SIMI
– 7 were advertised by independent dealers and not affiliated with the SIMI
So you see that there are all walks selling cars with money owed on them. It’s common for dealers to sell a car with finance, they just pay off the loan when the car sells. But if they sell you car, don’t pay the loan and go out of business there is a real possibility that the bank may chase you for the outstanding balance on the car, or that your car gets repossessed.
Take my advice and do your checks folks.
Note: Finance checks can be performed on the Motorcheck.ie website at a cost of €12 per check.
The above survey was used on RTE’s The Consumer Show last night on RTE1. To view the segment click here http://www.motorcheck.ie/blog/outstanding-finance-still-a-serious-concern/