Cartell, the car history expert, has revealed that 18.3 per cent of second hand cars on sale have outstanding finance waiting to be paid.
Highest level of outstanding finance yet recorded
It's the highest level of outstanding finance that the company has yet recorded; higher than the 16.6 per cent noted in December 2018, and the 11.5 per cent recorded in January 2017. The key age group is vehicles that are two years old - from a sample of over 5,906 vehicles offered for sale and checked via the Cartell.ie website in 2019, the figures show that more than 40 per cent of two-year-old vehicles are offered for sale with finance outstanding.
Some 39.4 per cent of one-year-old vehicles are shown to have outstanding finance, up from 35.9 per cent in 2018. This means there is now a two-in-five chance of a one-year-old vehicle being offered for sale with finance outstanding.
When it comes to three-year-old cars, 36.8 per cent still have finance left to be paid.
Older vehicles also affected
Older vehicles, which one might assume to be all paid for by now, are also not immune. Some 22.3 per cent of all four-year-old vehicles offered for sale in 2019 had outstanding finance against them and the rates of finance are going up for older cars too: four-year-old to ten-year-old cars all showed respective increases over the corresponding levels recorded last year.
Technically, there's nothing illegal about offering a car for sale with outstanding finance. In many - possibly most - cases the seller is simply going to pay off the remaining amount with the money from the sale. Of course, the problems arise when sellers are less than scrupulous...
Buyers need to be aware
John Byrne, of Cartell.ie, says: "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. There could be many reasons for this including new entrants in the finance market, better availability of finance, or, in the case of PCP, buyers may be increasingly financing the balloon payment that falls due at the end of the initial PCP term. What's really concerning is that finance levels are up across nearly all the years and the headline figure of 18.3 per cent overall is particularly concerning. Buyers are strongly advised to be cautious in the market as you cannot take good title in the asset until the final payment has been paid to the financial institution. This means you may be buying a huge problem."