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How to Check a Used Vehicle For Finance

When your looking to buy a second-hand vehicle, it can be a minefield. BUT that’s not to say you shouldn’t do it, the UK used car market is a great place to pick up a bargain. You just need to make sure you do your checks and proceed with caution.

Why you should “proceed with caution”?

In March 2019 we found that 11% of the vehicles we checked had outstanding finance! This could be a logbook loan, PCP or any other sort of car loan.

How can I check if a vehicle has a finance agreement against it?

We offer a comprehensive vehicle check for £8.99; it’s called the deluxe check. Simply enter the vehicles registration below, you will then get your free report with the option to get upgrade to a deluxe check by clicking “Full Deluxe Check – £8.99” button. If you purchase the deluxe check you will then be able to see if the vehicle has any finance records against it.

Why you should take extra precautions when buying a used vehicle

82% of new cars in the UK were bought with PCP loans according to BusinessInsider in 2017. This figure shows that just over 8 out of 10 new vehicles have used car financing to fund their purchase.

Of course, this figure will probably be lower on older vehicles but there is also the chance of logbook loans which our comprehensive deluxe check also checks for.

Some questions and answers about outstanding vehicle finance

Is it a wise idea to buy a vehicle that’s on finance?

No, it’s not a wise idea at all. it’s only a wise idea to make sure the vehicle your looking to buy is free of finance, what we mean by this is you need to make sure there is not an active finance agreement on the vehicle. You can do this by getting a comprehensive vehicle history check, which will detect if there’s any finance agreements on a vehicle.

The seller claims the finance has been paid off, but the vehicle history check failed on finance.

Trust the vehicle history check and not the seller! We have had emails from customers with similar situations before, so if you ever face a situation like this and you’re a customer then contact us BEFORE you buy the vehicle! We will be able to give you further instructions on how to clear this up.

If you really want the vehicle, but it’s on finance then

You’re going to have to do some legwork, there’s a few things you MUST do if you really want it that badly. We still DO NOT advise buying a vehicle on finance and think you should walk away, but if you feel you need to buy it that badly then you must:

  • Call the finance company and make sure you tell them you’re planning to buy the vehicle.
  • Ask them for the finance settlement figure.
  • Follow the steps they provide you with to ensure the vehicle finance has been cleared, the chances are they will tell you that the current owner must pay the full remaining amount of the finance agreement.
  • Get clarification from the lender that the finance has been fully cleared and the vehicle is entirely free of finance.
  • Once you get clarification from the finance company that the finance agreement is fully settled, perform a comprehensive vehicle history check to make sure the vehicle is free of finance.
  • If the vehicle fails the finance check, you should contact the provider and ask for further clarification (for example if you used us then email us and we can give further instructions).

Last note: Do not buy the vehicle until it passes the finance check!

What happens if you buy a vehicle that’s on finance?

The scary thing is, if you buy a vehicle on finance you stand to lose it entirely, even though you have paid for it. This is because, a vehicle with outstanding finance is often owned by the finance company until the debt has been fully paid off. So, the seller had no right to sell it in the first place!

Worse & Best scenarios when buying a vehicle on finance

If you are wondering what happens when you buy a vehicle on finance, then read on!

Scenario: Tom bought a car, it had outstanding finance, but he wasn’t aware.

Worst case scenarios

What could happen: The finance company may not accept the explanation (That tom had no knowledge of outstanding finance) and ask for the money back that’s outstanding on the vehicle or even worse they may take the vehicle away and recover it.

If this happens (and you didn’t have any knowledge about the existing finance), you should make a formal complaint in writing and contact citizens advice. If this doesn’t get you the desired results, legal action may be the next step.

Best case scenarios

If you buy a car that’s on finance and didn’t have any knowledge of it, you may have the right to keep it. This is more commonly known as “good title” and it basically means you have purchased a vehicle in good faith without any prior knowledge of the outstanding finance issue.

The downside of this is, the finance company that gave out the loan will still want their money back.

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