The UK Office of Fair Trading (OFT) launched a full investigation into the used car market after regulatory watchdog, Consumer Direct received 68,000 complaints during 2008.
Areas of contention included the sale of written-off cars, stolen cars, car cloning, forged documentation and selling of vehicles that are still owned by a finance company. These unscrupulous sellers are working to help those buying a car to part with their cash whilst escaping the legal consequences of their actions.
The Perils of the Used Car Market for Older Vehicles
The older a second-hand car the easier it is to steal. Simon Douglas, director of AA Car Insurance, stated in a key car crime report called "15% upsurge in vehicles stolen following robbery or burglary." that: “The British Crime Survey suggests that half of all cars stolen are over 10 years old - and these are the easiest cars to take because they aren’t necessarily equipped with the security and anti-theft devices that come as standard on modern vehicles.”
Why Identifying Stolen Second-Hand Cars is Vital
The owner of a stolen second-hand vehicle will experience problems when making an insurance claim. Niki Bolton, of eSure, stated in The Times article "How to buy a second-hand car" that: “If the vehicle was stolen, this would be identified when a policyholder made a claim. While we would cover all third-party costs, it is unlikely that we would pay for any damage to the vehicle because it is not the policyholder’s property.”
How to Avoid Car Cloning and Stolen Second-Hand Cars
Those considering buying a second-hand car should verify that the numbers on the V5C document match the car's engine number, Vehicle Identification Number (VIN) and number plate. The VIN is usually found in the engine compartment. Validate that none of the numbers have been tampered with as these are regularly amended to disguise car cloning or the sale of a stolen used car.
The Used Car Market and Vehicles Owned by Finance Companies
Helen Saxon, of the Finance and Leasing Association said that: “If money is owed on a car by a previous owner, the car still belongs to the finance company and can be taken from the new owner at any time. This is why it is very important to get a vehicle check on any used car you are considering buying.”
Performing an HPI vehicle check for just £19.99 validates critical information when buying a second hand car. Information provided includes previous damage, outstanding finance and an inspection report for stolen vehicles and number plate transfers. The following used car market figures from hpicheck.com indicate how perilous buying a car really is:
- 24 out of every 100 vehicles checked with HPI turn out to have outstanding car finance.
- 4 out of every 100 vehicles checked are written-off cars.
- HPI identifies 30 stolen vehicles every day.
- 15 out of every 100 cars checked have had a minimum of one number plate change.
Clocking the Mileometer
According to the Office of Fair Trading (OFT), clocking the mileometer costs those buying a car £100 million a year.
Frank Shepherd of Consumer Direct stated that consumers should: “Check MOT certificates and service documentation for mileage readings. Previous owners named on the V5C should be able to tell you what the mileage was when they sold the car.”
Legal Rights when Purchasing a Second-Hand Car from a Dealership
Consumers purchasing a second-hand car from a dealer enjoy legal protection under the Sale of Goods Act 1979. If a vehicle isn't of a satisfactory quality and fit for purpose, the buyer has the right to seek financial redress. Always try to buy from a reputable dealer and ensure that they are a member of the Retail Motor Industry Federation as it offers a conciliation and arbitration service.
The used car market can be a treacherous road to cross, yet it remains a necessity for those who can't afford a new vehicle. Following the checks alluded to above will help those purchasing a second hand car to avoid unscrupulous sellers and any costly financial repercussions.
Readers who found this article useful may also be interested in bad credit car loans.
Sources
Thompson, Lauren. (16 May, 2009). "How to buy a second-hand car." The Times.
Asa Ghaffar - Asa has over 10 years of practical experience in loan approval, secured lending, bad credit repair, stock trading and debt management.
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