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buyer beware

More used cars are being offered for sale with finance still outstanding

One in three used cars registered in the last three years have finance still owing.

NEW FIGURES show a rise in the number of used cars for sale in Ireland with repayments still outstanding.

Cartell reports that the proportion of vehicles for sale across all years with finance outstanding is 12.5 per cent which is up from 11.5 per cent in January and up from 9.5 per cent in June 2016.

It would seem that the trend for buying a car on a Personal Contract Plan (PCP) is putting second-hand buyers at risk of purchasing a car that hasn’t been fully paid for. This means that the vehicle is the legal property of the leading provider who financed the vehicle. The seller does not own the vehicle and the new buyer will not own it either. The finance provider can seize the car.

Your chance of buying a car with outstanding finance is greater if the car has been registered in the last three years. From a sample of 5,906 vehicles offered for sale and checked via the website so far in 2017, the results show that more than a third of vehicles registered in the last three years have payments outstanding.

In the case of one-year-old vehicles – those with 2016 registration plates – the number of vehicles offered for sale with finance outstanding has risen from 31.58 per cent for the full year 2016 to 36.83 per cent so far in 2017. This is an increase of 16.62 per cent. This means there is now almost a two-in-five chance of a one-year-old vehicle being offered for sale with finance outstanding.

For two-year-old cars, those with 2015 registration plates, 32.64 per cent of those checked were found to have outstanding payments. The figures also show there is now a one-in-three chance of a three-year-old (2014) vehicle being offered for sale with finance outstanding.

It’s not just newer vehicles that carry this risk either. Cartell’s research found that 8.97 per cent of 2010 vehicles checked had outstanding finance on them.

The rise in the proportion of vehicles offered for sale with outstanding finance could be due to people who bought cars on credit/hire purchase – especially in the last three years – and can no longer can’t meet repayments or possibly owners are testing the market to see if they can get a higher price than the Guaranteed Minimum Future Value (GMFV) agreed with the dealer.

As John Byrne from says:

A buyer is advised to check a vehicle for outstanding finance as the finance house owns the vehicle until the last payment has been made – the bottom line is that you can lose the vehicle.

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