With the rising cost of vehicles, it’s not uncommon for a car to be bought on finance. When it comes to buying a used car, there’s a possibility that the car may have finance still owing on it. So what should you do if you find yourself in this situation?

Almost 90% of cars bought by private buyers are bought on finance. Until the buyer has reached the end of the finance term, and paid off all the money owed, the car does not technically belong to them. This poses some problems if they try and sell the car on.

It is technically illegal for someone to try and sell on a car with finance still owing on it as the vehicle is rightly the property of the finance company. Some people will still try and sell a car on before they have finished paying off the finance, so be aware of when you’re buying a used car, that all paperwork is in order.

This can be done easily through a car history heck. As well as finding out if there is finance still owing on the car, you can also tell if the car has ever been written off or stolen, check the number of previous owners or recorded mileage and lots of other details about the car.

If you find out a car you are trying to buy still has finance owing, simply walk away from the purchase. Legally they can only sell the car when it is theirs to sell, so unless they settle their debt with the finance company first, you could land in trouble yourself.

If you do choose to buy a car with outstanding finance owing, you are now the ‘owner’ of that car, inheriting any debt, and the finance company will now come to you to settle it. You will need to track down the person who sold you the car, which can be difficult, especially if they knew they were selling the car with outstanding finance payments. Finding them and trying to convince them to pay their outstanding debt will probably only be accomplishable through court action, which could cost a significant amount.

When looking at used cars, always make sure you give each one a full history check to make sure that no outstanding finance payments exist, and the car is legally owned by the seller.