According to figures released by Irish vehicle histories expert Cartell.ie, the number of second hand cars on sale with finance still owed on them has fallen by eight per cent.
Buyer beware
Cars being sold with money still owing on them is relatively common and, in the most cases, the owner intends to use the money from selling the car to clear the outstanding debt. However, there are unscrupulous sellers out there who will simply stop their repayments once the vehicle is sold, meaning that the finance company that issued the loan can legally repossess the car. The innocent buyer has little-to-no recourse at that point and so those shopping in the second-hand market are advised to be extremely wary of any car with finance still owed on it.
Significant reduction
Thankfully, according to Cartell's figures, the overall number of cars on sale with finance still owed has fallen in the first six months of 2021, from 42 per cent at this time last year, to 34 per cent this year. In the case of one-year-old vehicles - which are statistically the most likely to have finance still owed - the figure is 28 per cent. That's still a worry - it means that more than one quarter of 2020 model year cars on sale are still subject to finance agreements - but it is a significant reduction from the figure of 37 per cent recorded this time last year.
For two-year-old cars, the number has fallen from 38 per cent last year to 32 per cent this year.
Older cars at the same level
For older cars, the numbers are actually going up a little. In 2020, 13 per cent of seven-year-old cars still had finance outstanding, and that has gone up to 14 per cent this year. Six-year-old cars have stayed at the same level - 16 per cent.
Jeff Aherne, Innovation Lead, Cartell.ie, says: "The overall percentages of vehicles offered for sale with finance outstanding in key registration years has fallen from 2020 levels, but buyers should not be complacent. Even taking six-year-old vehicles as an example, nearly one-in-five of those still return outstanding finance. The levels of finance, at the top of the market, despite the recent drop, are still high - 34 per cent of three-year-old vehicles are listed as having outstanding finance. 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."