Checking Finance on a Car Before You Buy It

Purchasing a Car with Outstanding Finance Charges

It shouldn’t be a huge surprise that around 86.5% of new cars purchased privately are done so with some type of financing, whether its bank loans or hire purchases.

What may be a surprise is the fact that a financed car cannot be legally sold until the debt is paid in full. Even the smallest amount, such as £50, prevent a legal, binding private sale. This is illegal, whether you are or are not aware of the debt owed.

If you decide to purchase through the dealership, the situation changes, thanks to dealer/ lender arrangements and Stockings Loans.

Does a Car Have Finance Outstanding?

If you are considering buying a car on outstanding finance privately, it is absolutely essential that you check car finance online to learn if the car has money owed on it and if so:

  • ·        The name of the finance company
  • ·        Type of financing
  • ·        Finance agreement number
  • ·        Finance company contact information

If the current owner offers you their own car history check, it’s okay to look at it, but you’ll still want to run your own. You never know when a seller may try to show you an outdated report.

Purchasing a Car with Finance Outstanding

If you absolutely have to check car finance outstanding, you do have options for making it your own.

·        First, you need to determine the exact amount owed. This is referred to as the settlement figure.
·        Second, contact the finance company and make them aware of your plans to purchase the car. Ask them how much it would cost to settle the car, allowing you to legally purchase it. Also, ask about any terms, policies, procedures, and conditions you will need to follow.

·        Be aware that most finance companies do require that the full amount owed be paid by the person named in the finance agreement.  Occasionally, you may find a company that will allow you to pay the finance outstanding and the rest of the purchase price to the seller. This is entirely up to the lender.

Use the following link for information about stocking loan definitions and the steps needed when buying a car from a dealership with money owning form a lending company. 

So, what happens if the selling price is less than what is owed on the car?

Negative Equity Car Finance

This is the term used to explain the situation when the car’s market value (or selling price) is lower than the amount owed on it.

For example, if a car has a selling price of £8000, but outstanding finance of £10000, the lender must be paid the full £1000. In this case, the buyer would directly pay the lender £8000 and the seller would directly pay the additional £2000 to the lender.

Watch this explainer video on handling outstanding finance correctly:

 Finance Settlement Letter

Regardless of who pays off the finance (you or the seller), the finance company will need to provide you with a settlement letter. This letter should include the vehicle’s details and the fact that the car has no further interest owed on it. You should put this letter in a safe place just in case you were to need it in the future.

Insurance Category Car Write Off Check

Car Write-Offs

Insurance category written-off cars and depleted values

Did you know that you may still be able to buy a car that has been written off? Today, if you are making an informed decision and fully understand its safety and value, quality, and reliability. To safeguard your investment run a free car check and get understand the car history before you buy. 

car accident checks

Here are the car categories and classifications of car write offs that you’ll need to know:

·        Category A: includes vehicles with extensive damage that caused irreparable damage with no to little hope of salvaging parts
·        Category B: includes vehicles with irreparable damage, but with salvageable parts
·        Category S and N: includes vehicles in which the vehicle can be repaired, but the cost of repairs would exceed its overall value

Please be aware that before October 1, 2017, categories S and N were known as categories C and D.

It’s important to know that insurance companies do not want to repair cars in categories S and N. This is because repairs are possible, but the insurance company has decided it is more cost effective to replace them. However, you may still purchase cars in either of these categories.

car write off categories checks

The Big Difference Between Categories N and S

While cars in either MIAFTR (MOTOR INSURANCE ANTI-FRAUD THEFT REGISTER) category can be repaired and put back on the road, there is one major difference you’ll want to consider before doing this. Cars in category S have had structural damage to their frame. (This damage could be anywhere, including the chassis.)  Cars in category N had not had structural damage to their frames.

Cars in categories S and N often land in salvage yards where a third party will purchase them, make repairs, and list them for sale.

Purchasing Cars in Categories S and N

As long as the car has undergone all the necessary repairs and has received Autoalign certification, it is legal to purchase them. Their value is usually much lower than a comparative car that hasn’t been classified as S or N. While this means you may be able to get the car at a good price now, you will likely have trouble selling it in the future. Have a look at a vehicle history check for factual information on car background. A good service includes finance, write off status, theft and mileage checks. See this free hpi check video for more information about this type service. 

On a final note, you should know that not all insurance companies will insure a category S or N car. You will need to check with individual companies beforehand. You’ll also want to do a thorough online check to make sure all information about the car checks out.

Vehicle Test Driving Checks

Test Driving a Car

Full car checks before you buy

We all know that a test drive is an absolute must when you are considering purchasing a car, whether from a dealership or from an individual.  But, what exactly are you looking? Here’s what you need to know about test driving a car.

how to run a car check correctly

Plan for 20 minutes.
For the best test drive, you’ll need to drive the car at various speeds, including slow and at the national speed limit. You’ll also want to drive and investigate the car over an uneven or bumpy road, go through a roundabout, and drive in an area with multiple traffic lights.  The overall goal is to really test the car’s performance by putting it under some stress. During your vehicle check, pay attention to how smooth the car drives and how it transitions.

As a private buyer, you will be depending on your own car insurance in the event of an accident. Most comprehensive policies cover third parties driving another vehicle, but you’ll want to check with the insurance company to be certain.

If you do not have current car insurance coverage, you may still be able to take a test drive. If you are buying through a dealer, their trader’s policy may extend to you. If you are purchasing from a private car owner, you will need to contact an insurance company beforehand to learn about your comprehensive policy options.

What Are You Looking for?
There are certain things you should do when test driving a car. They include:
·        Starting the engine multiple times to ensure all dashboard lights come on and switch off quickly
·        Turning the radio, air conditioner, and heater off, at least for a few minutes. You’ll want to make certain the car is silent during your drive.

·        Listening carefully for any strange noises when going over potholes or bumps
·        Rolling the window down and listening to check the car and how it sounds on a bumpy road
·        listening for any whining or grinding noises in each gear (This is a sign of issues with the gearbox, which may be a costly expense.)
·        When steering, be wary of a car that pulls to the left or right, as this is a sign of tracking issues, and/or vibrations, which can indicate a bent drive shaft or wheel balancing issue)
·        Brake hard to look for any steering wheel vibration or grinding noises that may mean the brake pads need to be replaced
·        Rev the engine to check for acceleration. If there is minimal acceleration, the clutch may be slipping
·        Try the steering on full lock, while slowly pulling away. Any crunching or clunking noise could be a sign that the CV joint has extensive wear and tear
·        Leave the engine on for a few minutes when your test drive is over. Then, check the temperature gauge to ensure it’s not running hot.

What to Look for When the car is Stationary
·        Push down on the clutch pedal, while listening for obvious changes in the engine’s sound, such as whining
·        Turn the engine off. Stop for 10 seconds and restart the car. The engine should start up just like it did the first time.
·        Give diesel engines extra attention. If they have a hard time starting when hot or cold, there could be an extensive problem hiding underneath.

After you’ve taken the car for a drive, consider how it makes you feel. Are you comfortable in the car? If it feels right, be sure it passes all on online checks before finalising your purchase.

Car ownership and previous owners

All about car ownership

Owners data via CarVeto and DVLA

There are thousands of queries relating to a cars ownership and this number has spiked over the last few years ever since DVLA ceased the inclusion of the previous owner on the V5C registration document (otherwise known as the V5C log book).

In Mid 2018, DVLA made this historic change to car documentation.

You may be wanting the contact information of your cars last owner. Good reasons include:

  • Find out when the car was last serviced (this may have been excluded from the rubber stamped service book)
  • How often the previous owner serviced the car
  • If the car had any major mechanical faults
  • When the cambelt was replaced (this is often the number one reason due to the expense of a replacement belt)
  • Other legal reasons

CarVeto offers the nearest data for car ownership. The car ownership data includes information like:

  • Date of sale and purchase of the previous owner
  • Date of purchase of the existing owner
  • Date of registration
  • Car age
  • Date of reg
  • The area postcode (not exact postcode) or city/region where the car is currently registered with DVLA via the V5C logbook. 
Plus, there is a unique MOT advisory and MOT history check report that clearly outlines tests, dates and advisory items that are not readily available in the public domain without the V5C logbook number of MOT test numbers. 

This brief car ownership video explains what's included with every car previous owners check  from CarVeto

Electric or Not Electric? That is the Question...

The State of Things Electric

Electric Cars - the future is on pause?

In the midst of the reorganization of General Motors and Chrysler, it’s disappointing to learn that Chrysler is bailing out of the electric vehicle game, jettisoning a plan to have 500,000 Chrysler EVs on the road by 2013 and shuttering its “Envi” division. (Even more disappointing since the company took $70 million from the Department of Energy in August to develop a test fleet of hybrid pickups and minivans.)

car checks for electric vehicles

The cited reason for the dramatic change in direction? Problems with battery storage. Well. Duh. That’s the name of the EV game and it leaves us to wonder how well Chrysler will do reaching a break-even point by 2011 (that’s the plan) and rolling out all those new models on Fiat platforms when the face of the automotive game is changing toward alternative means of propulsion. Short-term profitability but no long-term plan embracing new technology? Maybe not the wisest choice.

The competition apparently has no battery-related qualms as Toyota contemplates a whole family of hybrids based on the Prius, a name that in and of itself could well become a brand. General Motors is clear that it sees the Chevrolet Volt, which will debut in 2010, as the opening shot in a volley of vehicles combining rechargeable batteries and gas-powered generators. It’s a reasonable trade-off — 40 miles on a single electric charge, a conventional engine for longer excursions — even if the initial price tag of $40,000 stops some short. (Figure in a $7,500 consumer tax credit and it’s a little more palatable.)

And the big boys are far from the only ones embracing (or abandoning) big electric vehicle plans. Fisker is buying an abandoned GM plant in Delaware for $18 million with the intent of retooling the facility as a construction site for plug-in hybrids. After a three-year conversion, and armed with $528.7 million in federal loans from the government’s Advanced Technology Vehicle Manufacturing program ($175 million of which will go directly to the Delaware plant), Fisker expects to be rolling out units by 2012. One of those products will be a mid-sized family sedan currently set at around $39,900.

Roll all this and countless other projects together and we are looking at a nascent electric vehicle revolution, one that will initially be expensive for the consumer but that has tremendous long-term potential for our global dependence on fossil fuels. A year ago I confess I didn’t think we’d be this far down the EV road. Now? I’m looking forward to seeing what 2010 holds in store for this exciting transportation genre.