Outstanding finance check

An outstanding finance check tells you whether money is still owed on a car. It matters more than almost any other check, because with most car finance the lender owns the car until the last payment is made. If you buy a car with finance on it and the seller doesn't pay it off, the lender can try to take it back from you.

Our outstanding finance check is part of the Full check (£8.99). Results appear on screen in seconds.

What the finance check shows

• Whether there's an active agreement registered against the car.
• The type of agreement, such as PCP, hire purchase or conditional sale.
• The finance company and how to contact them.
• When the agreement started.
• Log book loans, where the car has been used as security for a loan.

Why you can't tell from the paperwork

A lot of buyers assume the V5C logbook would show finance. It doesn't. The V5C names the registered keeper, the person responsible for the car, not its legal owner. Someone paying off a PCP deal has a V5C in their name while the finance company owns the car.

The seller may not even realise it's a problem. Some genuinely think they can sell the car and pay off the balance later. Others know exactly what they're doing. Either way, the only reliable way to find out is to check the finance records.

What happens if you buy a car with finance on it?

The finance company may write to you asking for the car back or for the balance to be paid. Private buyers who bought in good faith, without knowing about the finance, may be protected by the Hire Purchase Act 1964, which can stop the lender taking the car from you. But it only covers some types of agreement, it doesn't cover dealers, and sorting it out can take months.

It's far easier to find out before you pay. Our guide to buying a car with outstanding finance covers what to do if it's already happened.

Can you still buy a car with finance on it?

Yes, and plenty of people do, as long as the finance is paid off as part of the sale:

1. Ask the seller to get a settlement figure from their finance company.
2. Pay that amount directly to the finance company, with the seller's agreement, not to the seller.
3. Get written confirmation from the lender that the agreement is settled.
4. Pay the seller the rest.

Buying from a dealer? A reputable dealer settles any finance before selling a car and will happily show you proof.

When to run a finance check

As close to paying as you can. Finance can be taken out against a car at any time, so a check from a few weeks ago isn't enough. Many buyers run one when they find the car and a second just before they transfer the money. If you're doing that, a bundle of Full checks costs less per check.

More than finance

The Full check that includes the finance check also covers write-offs, stolen markers, salvage history, mileage, keepers and a valuation. If you want to see how it's laid out first, have a look at the sample report.