A new survey carried out by Motorcheck.ie has found one in seven cars for sale on the Irish used car market, has finance outstanding. Of 100 cars examined in the survey, 21 percent had been on a finance agreement on the day they were advertised, while 14 percent have outstanding finance.
Urging used car buyers to seek proof that finance has been cleared before taking ownership of a vehicle, Motorcheck’s Shane Teskey said "Whilst a red flag for finance on a Motorcheck report is not necessarily a deal breaker, it is very important that the buyer finds out what the nature of the finance agreement is before concluding a purchase. It could be finance provided by a bank for stocking purposes which is a relatively common arrangement these days or it may be a finance agreement that is still active in the name of a previous owner. The latter is a very serious problem and could lead to a car being repossessed by a bank at any time.”
Mr. Teskey also said the terms under which 'stocking finance' is supplied to a dealer have recently changed. In some banks, new and used vehicles are automatically flagged as being on finance when they are covered by a stocking loan. In most cases, the bank’s interest in the vehicle is terminated by the dealer at the point of sale, but independent confirmation is still advisable. Mr. Teskey continued "If the dealer responsible for clearing the finance goes into liquidation there is a very real chance that the bank will follow the new owner and repossess the car".