The car finance scam you need to avoid when buying a used car

Millions of cars could have outstanding finance in the UK – here is how to avoid being scammed

A car finance scam is leaving used car buyers out of pocket – and the problem is getting worse, according to experts.

Used car buyers are being warned they might lose their car thanks to a type of fraud some unscrupulous sellers are using.

In the first four months of 2018 a total of one in three cars has been sold with outstanding finance, meaning the buyer could lose the car and the money they paid for it.

If a car does have outstanding finance on it the debt moves with the car, meaning used car buyers could be lumped with a hefty bill or face losing their vehicle entirely.

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Selling a car with outstanding finance is fraud if the buyer is not told but data expert HPI says it is more likely than ever to be caught out.

Fernando Garcia, head of consumer at HPI said: “Buying a car with outstanding finance can land the unwitting buyer in trouble.

“The debt stays with the vehicle not the borrower. Even if a buyer bought the vehicle in good faith, if the finance hasn’t been settled then the lender could repossess the vehicle, meaning you could lose the car and the money you paid.”

Buyers of supercars and performance hatchbacks are more likely to have outstanding finance with 48.6% flagged this year, followed by coupes and 4x4s.

Buyers are urged to check a used car’s history using services such as HPI Check , the RAC or the AA .