Survey Reveals 1 in 7 Cars Have Outstanding Finance



In a recent survey compiled by the car history check website Motorcheck.ie, one in seven cars of the one hundred surveyed were confirmed to have finance outstanding. 
The survey focussed on vehicles that were advertised for sale by private sellers, non-franchise dealers and main dealers. 
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 

Commenting on the results Shane Teskey, MD at Motorcheck.ie said “It’s clear that outstanding finance could be a major problem for anyone buying a used car. Whilst a red flag for finance on a Motorcheck report is not necessarily a deal breaker it is very important that the buyer finds out what the nature of the finance agreement is before concluding a purchase. It could be finance provided by a bank for stocking purposes which is a relatively common arrangement these days or it may be a finance agreement that is still active in the name of a previous owner. The latter is a very serious problem and could lead to a car being repossessed by a bank at any time. 

The terms under which ‘stocking finance’ is supplied to a dealer have recently been changed. A new practice in use by some banks means that new and used vehicles are automatically flagged as being on finance when covered by a stocking loan. In the vast majority of cases the banks interest in the vehicle will be terminated by the dealer at the point of sale but independent confirmation is still advisable. 

“If the dealer responsible for clearing the finance goes into liquidation there is a very real chance that the bank will follow the new owner and repossess the car” said Teskey.

He recommends that a buyer always seeks proof that finance has been cleared before taking ownership of a vehicle. Motorcheck.ie will independently verify the removal of any existing agreement with the bank in question free of charge for its customers. 

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/

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