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Sales are rising but beware of increasing fraud, buyers told
publication date: Nov 16, 2010
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author/source: Robin Roberts
Car dealers enjoyed a good September, as figures
from the Finance & Leasing Association showed an increase in new and
used car finance compared to September last year.
The number of new cars sold
on finance to consumers was up by 5% and the number of used cars by 6%, despite
a fall of almost 19% in the total number of private new car sales in September.
And, consequently, the percentage of new cars sold
to consumers on dealer finance over the last 12 months rose by more than two
percentage points, from 47.5% in August to 49.6% in September, showing that
dealer finance remains a popular choice for consumers.
| | | | However, despite the welcome growth in the consumer
market, business usage of financing for cars dropped by 17% for new cars, and
by 4% for used cars in September.
Commenting on September's motor finance figures,
Paul Harrison, Head of Motor Finance, said, "The rise in the use of motor finance is great news
for dealers, coming as it does in such an uncertain and volatile economic
climate.
"Over the year we have seen ups and downs in the number of people using
dealer finance for both new and used cars, so it is encouraging to see a strong
performance in the important month of September. | Car manufacturers will have to provide security
technical information to mechanics nationwide, regardless of their brand
affiliation, the EU has ruled.
To ensure the information doesn't land in the wrong
hands, posing a threat to vehicle security and triggering a rise in car crime,
the Retail Motor Industry (RMI) will next year launch a body that will, having
ascertained and certified that they are reputable, award garages with access to
manufacturers' security technical information.
RMI Standards and Certifications (RMISC) will be
launched in 2011, making the RMI the first organisation in Europe to become a
certification body for Security Technical Information.
| | | "But we still have some concern about the business
cars sector, where new loans have fallen. Businesses are still cautious about
investment and this is likely to continue while the economic effects of last
month's Comprehensive Spending Review remain unclear." | | | | | Vehicle information
expert, HPI, reports finance related issues were one of the biggest cause for
claims against the HPI Guarantee in 2009.
Whilst finance fraud by true car
criminals is believed to be on the decline, the tough economic climate means
used car buyers are at increased risk from the threat of innocent fraudsters.
Increasing numbers of people are selling their vehicle before they have paid
off the outstanding finance, leaving buyers at risk of losing their cash and
the car. HPI warns buyers to watch out for finance fraud before purchasing a
vehicle.
"As finances are
squeezed, many people use the money raised from the sale of a car to address
more pressing, short term, financial pressures than the car's finance agreement
itself," explains Nicola Johnson, Consumer Services Manager for HPI.
"However,
selling on a car that has outstanding finance will mean the car's title remains
with the finance company and therefore, legally, the vehicle remains their
property. Consumers must recognise that used car sellers don't have to be
hardened criminals to represent a risk."
HPI believes there
are thousands of UK motorists driving cars with the misconception they
legitimately own them. Many of these people are unlikely to ever discover the
truth as the finance agreement is eventually paid off by the vendor. However,
as seen by HPI, many do fall foul of the "innocent fraudster".
They only
realise the true situation when they either try to sell on the vehicle to
someone who conducts a history check which reveals the facts, or they write off
the vehicle in an accident.
An insurance company is duty bound to pay the
finance company who technically still owns the car, not the person who had the
accident in the car, who believes they own it.
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