Imagine buying your dream car for £15,000 only to have it repossessed six months later because the previous owner still owed £10,000 on it. You lose the car and your money. This scenario happens more often than many buyers realise.
1 in 3
Used cars with outstanding finance
£10,000+
Average loss from finance fraud
£10
Cost of a finance check
What Is Outstanding Finance?
When someone buys a car on finance such as HP, PCP or lease, the finance company technically owns the vehicle until it is paid off in full.
If the owner sells the car before clearing the loan, the finance company usually has the legal right to repossess it, even from an innocent buyer.
The law protects the finance company
UK law protects finance companies more than buyers. The finance agreement follows the car, not the person. You can lose both the car and your money with no easy way to claim it back if the seller disappears.
How Common Is This Problem?
A significant share of used cars have outstanding finance when advertised.
Many sellers do not realise they still owe money or misunderstand their agreement.
Some sellers deliberately hide the debt to make a quick sale.
Private sales are especially risky because you do not have dealer protections.
Real World Scenarios
The honest mistake
Someone buys a car on PCP and assumes that after a few years they own it outright. They sell the car privately, believing everything is legitimate. Months later, the finance company contacts the buyer and repossesses the car because a large balance is still outstanding.
"I lost thousands when the finance company repossessed the car I bought. The seller disconnected their phone. I was told it was a civil matter."
Even dealers can be caught
Some dealers have taken part exchanges with hidden finance and unknowingly sold them on. When the finance company traces the car, it leads to a painful and expensive process for everyone involved.
Why Finance Checks Are Essential
You cannot tell by looking at a car whether it is on finance. The seller might not know, might be hiding it or might be in the process of settling but not yet cleared.
Without a finance check
- The finance company can repossess the car.
- You lose your money if the seller disappears.
- You have no claim against the finance company.
- You face legal costs with no guarantee of recovery.
- You can be left suddenly without a car.
With a finance check
- You know the status before you buy.
- You can negotiate or walk away.
- You protect your savings.
- You have much better peace of mind.
- You get this protection for around £10.
What Carpeep Checks Include
Comprehensive finance coverage
- Outstanding hire purchase agreements.
- PCP (Personal Contract Purchase) agreements.
- Lease agreements.
- Conditional sale agreements.
- Bank loans secured against the vehicle where data is available.
Warning Signs of Hidden Finance
Recently registered car being sold below market value for no clear reason.
Seller insists on cash payment only.
V5C shows very recent registration in the seller's name.
Seller wants to sell quickly and uses pressure tactics.
Seller is vague or evasive about why they are selling.
Seller will not provide ID or proof of address.
What to Do if Finance Is Found
Before you buy
If your check reveals outstanding finance before you buy:
- Do not proceed with the purchase.
- Ask the seller to settle the finance first.
- Request written proof of settlement from the finance company.
- Run a fresh check after settlement to confirm.
- If the seller refuses or cannot settle, walk away.
Legitimate finance settlement
Some sellers are honest about outstanding finance and settle it as part of the sale. Get the settlement figure in writing, wait for confirmation from the finance company and run a fresh check before you pay. Never hand over money until the finance is fully cleared.
The Small Cost of Protection
A Carpeep vehicle check costs a fraction of what many buyers lose to finance fraud. It includes comprehensive finance checks across major UK lenders.
Compare that to losing a car worth thousands, dealing with legal stress and suddenly being without transport. The value of a proper check becomes obvious.
Finance check checklist
- Run a comprehensive finance check before viewing a car.
- Ask the seller directly about finance history and see documents.
- Verify that V5C keeper details match the person selling.
- Request proof of settlement if finance was recently cleared.
- Do not pay cash without checking first.
- Keep copies of checks and documents for your records.
Outstanding finance is one of the most common hidden problems with used cars and one of the most devastating for buyers. For the price of a simple meal, you can remove this risk completely. Never buy a used car without running a finance check.
