Outstanding finance check: is the car still on finance?

When a lender funds a car, it usually registers the agreement against the vehicle with the motor finance industry’s registers. A vehicle history check reads them and shows any live agreement — our car check gives the lender, the type of agreement, when it started and its term.

Two limits are worth knowing. A check can only show agreements that were registered, so ask the seller directly too. And a settled agreement can take a little while to clear, so a car paid off recently may still show finance — the lender’s settlement letter is the evidence.

1. Don’t pay the seller anything yet.
2. Ask the seller to settle the agreement and give you the lender’s letter confirming it’s paid off, then check the car again.
3. If the seller can’t settle it first, the seller (as the account holder) can ask the lender for a settlement figure. Pay that amount to the lender directly, against the lender’s written figure, and the rest to the seller — and confirm the lender’s payment details with the lender yourself.
4. If the seller won’t do either, walk away.

Buying from a dealer is simpler: dealers settle finance on the cars they take in, and a trader selling you a car it had no right to sell is answerable to you under the Consumer Rights Act 2015.

You may be able to keep it. Part III of the Hire Purchase Act 1964 says that where a car on hire purchase or conditional sale is sold to a private buyer who buys “in good faith without notice” of the agreement, the sale works as if the seller had owned it. In plain terms, the car can become yours.

Citizens Advice sets out when that applies: you didn’t know about the finance, you bought honestly, you’re a private buyer rather than someone in the motor trade, and you’re the first private buyer from the person who had the agreement (or a later one whose seller already had good title). It also says it’s for the finance company to prove you don’t have good title.

The protection has limits. It covers hire purchase and conditional sale, not other kinds of loan, and it doesn’t protect motor traders. Part III applies in England, Wales and Scotland. It doesn’t help at all with a stolen car. If a lender contacts you, write back explaining that you bought in good faith, with the advert, the receipt and the seller’s details; if that doesn’t settle it, the Financial Ombudsman Service can look at a complaint.

This is general information, not legal advice — Citizens Advice or a solicitor can look at your case. And it’s a safety net for after the event, not a reason to skip the check: checking first avoids the dispute altogether.

That phrase covers two other things. Checking whether you can get finance is a credit check with a credit reference agency. If you think you were mis-sold car finance, the Financial Conduct Authority’s website explains how complaints work. This page is about finance owed on a car you’re thinking of buying.

• Outstanding finance, with the lender, the type of agreement, when it started and its term.
• Stolen: whether the car is recorded as stolen on the Police National Computer, with the police force to contact.
• Insurance write-offs: the category (A, B, S or N, or the older C and D), the date of the loss and where the damage was.
• Salvage auctions: any listing, with the lot description, damage, mileage and links to the auction photos where they exist.
• DVLA history: scrapped, exported and imported markers, plate changes, colour changes, the number of previous keepers and V5C logbook dates.
• Experian’s Data Guarantee: up to £10,000 for 12 months from the check if the finance, stolen or write-off data turns out to be wrong. The check must be run before you buy, and Experian’s terms apply.

For finance, it includes the lender’s contact number, so you can ask for a settlement letter before you pay.

Data provided by Experian. The car check is £12.99 on its own, or £8.00 added to a manufacturer service history check (£17.99 for both). Your card is authorised when you pay and charged only for what’s delivered. It comes with Experian’s Data Guarantee: up to £10,000, or the car’s market value if lower, for 12 months from the check, if the finance, stolen or write-off data is wrong (Experian’s terms apply, and claims go to Experian). Finance and theft records change daily, so check again on the day you buy.