Number of 'in-debt' cars offered for sale hits record high
Buyers are urged to check out if repayments are due as data reveals 18.3pc have 'finance outstanding'
The proportion of second-hand cars being offered for sale that still have monthly repayments due has hit record levels, according to an extensive new analysis.
Experts are pleading with potential buyers to be extra vigilant when purchasing used cars privately.
In a worst-case scenario, buyers face the prospect of being left without the car they have just purchased.
That is because, if there are outstanding payments, the lending institution that is owed the money can legally seize the vehicle.
In such a situation, an innocent buyer would be left at a total loss. It could mean losing thousands and thousands of euro of the purchase money.
What is now being viewed as an increasingly serious situation emerges in the latest survey of cars-for-sale by vehicle data expert Cartell.ie.
It finds that the proportion of vehicles offered for sale with 'finance outstanding' is 18.3pc on average - or close to one-in-five cars.
That is up from 16.6pc in December 2018 and a major rise on the 11.5pc level in January 2017.
The report says: "These are the highest levels that Cartell has recorded."
The statistics were extracted from a sample of more than 5,906 vehicles offered for sale and checked via the Cartell.ie website last year.
One of the more dramatic findings is that in excess of 40pc of two-year-old vehicles are being offered for sale with repayments outstanding.
The proportion of one-year-old vehicles (2018-regs) with repayments due has shot up from 35.9pc to 39.4pc.
"This means there is now a two-in-five chance of a one-year-old vehicle being offered for sale with finance outstanding," Cartell.ie warns.
Of the three-year-old vehicles (2016 registration) checked last year, the experts say that you had a 36.8pc chance of buying a car with finance still owed.
Cartell's John Byrne added: "Not only are finance levels the highest we have ever recorded but the increases can be seen right across the board.
"We are seeing gains in virtually every year segment, indicating that more and more people are financing their second-hand car purchase."
Among the suspected reasons given for the spike in numbers are:
* PCP drivers testing the market to see how much more than the guaranteed minimum value agreed in their contracts they can get;
* New entrants in the finance market;
* Better availability of finance;
* People unable to meet their repayment commitments.
Mr Byrne says it is worrying that finance levels are up all across the years and the headline figure of 18.3pc overall is particularly concerning.
"Buyers are strongly advised to be cautious in the market as you cannot take good title in the asset (in other words own the car so you can sell it) until the final payment has been made to the financial institution," he added.
"This means you may be buying a huge problem."
The survey goes on to show that even older vehicles are regularly offered for sale with finance outstanding.
For example, 22.2pc of all four year olds offered for sale in 2019 had outstanding finance against them, the data shows.
Four-year-old to 10-year-old cars all showed respective increases over the corresponding levels recorded last year.
It has to be pointed out that checking on finance is part of the service provided by experts such as Cartell.ie.
Critics are entitled to point to a vested interest in highlighting research that encourages potential buyers to use its website.
Nonetheless, it is also a most helpful alert and warning for potential buyers.
Regardless of motive, if it averts the nightmare scenario that buyers could face if they pay for a car that is not the seller's to sell and lose thousands of euro, it is doing them a great service.