History checks by automotive trade companies between April and June this year show that 26.1% of used cars had outstanding finance.
According to the figures from information services company Experian outstanding finance continues to be the prevalent risk factor car dealers have to manage when acquiring used vehicles.
Other risks identified by Experian’s AutoCheck included ‘written offs’ and ‘stolen vehicles’.
Of the vehicles checks, 3% were recorded as ‘written off’ whereas three in every 1,000 vehicles checked, were identified as stolen.
The total number of vehicles being checked by motor retailers using the provenance tool Experian AutoCheck in Q2 2012 increased by 13% compared to the same period last year.
These figures demonstrate the increasing importance car dealers’ are placing on managing risk, which in turn helps to also highlight levels of risk dealerships are exposed to when acquiring new stock.
Andrew Ballard, principle consultant at Experian Automotive in the UK and Ireland, said: “With more than a quarter of vehicles offered to them identified as having outstanding finance, car dealers cannot afford to take any chances with due diligence.
“Knowing a vehicle has outstanding finance is a risk, but this data also empowers dealers with insight allowing them to factor that into their dealing with the vehicle owner.
“By understanding the risks they are exposed to, ensures dealers are better equipped to make buying decisions.”
Motor Consultants - 23/10/2012 12:16
“Knowing a vehicle has outstanding finance is a risk, but this data also empowers dealers with insight allowing them to factor that into their dealing with the vehicle owner. “By understanding the risks they are exposed to, ensures dealers are better equipped to make buying decisions.” EVERY vehicle should be routinely checked as part of the sales process. Not all customers will tell the truth during qualification, especially if a sales exec has not built up enough trust and rapport. Performing the check when valuing a part exchange allows the sales exec another opportunity to add value to the dealers proposition that all the cars on sale have been checked and broach the subject of funding again. It should however not be used as a short cut for thorough customer qualification as I have seen in some cases as some lenders do not register their "interest in a car" as they only offer personal loans.