It’s a motoring nightmare: you hand over your hard-earned cash for a used car, delighted with your new wheels, yet weeks later you find out your car is actually the property of a finance house, which is entitled to drive it away.
The latest figures from vehicle history checking website Cartell.ie suggests one in six used cars on sale may be at risk of repossession as they still have finance outstanding on them.
The simple truth is that if the loan has not been fully paid off, then the car wasn’t legally the previous owner’s to sell. It belonged to the bank or finance institution that issued the loan, and they can take it back from you, even if you paid the supposed owner in full. Worse yet, there’s little recourse for you – in the case of a repossession, the finance company is acting entirely legally, and your only hope is to try and take legal action against the person who sold you the car.
While it’s true to say the vast majority of sellers will use the proceeds of a sale to clear that loan, there’s a clear danger that they’ll just walk off with your money, leaving you with a potential repossession.
For buyers the message is pretty clear. Check. Everything. Carefully. Ask to see every scrap of paperwork pertaining to any potential used-car purchase, and do a background history check to uncover any potential problems. Don’t hand over any money for any car until you’re entirely satisfied that the seller genuinely has the legal right to sell you the car. You can also turn to reputable dealers. Members of the Society of the Irish Motor Industry (SIMI) are not permitted to sell on used cars with outstanding finance.
There are obviously good deals to be had buying private, but with the savings come the risks. And with more new cars being sold under Personal Contract Plan (PCP) finance schemes, you need to be wary that the car is not simply a hire-purchase lease by the seller. You may be able to pursue them through the courts for recompense if the car is seized, but that can take time, tie up your funds and leave you without transport in the meantime.