Selling a car which you do not yet own is the most common type of car fraud, according to figures released today by the Finance and Leasing Association (FLA) to coincide with Car Crime Awareness Week.

‘Conversion fraud’ – where motorists sell cars they do not own – accounted for almost 40% of all car finance frauds in the last three months of 2011. This represented around a 10% increase in this type of fraud over the same period in the previous year.

If you buy a car on finance, you are not the legal owner of that car until you have made all the payments. Until that point, the finance company owns the car, and you are the registered keeper. If you sell the car, you are committing fraud, as you are selling property that is not yours.

Motor finance fraud cases overall fell by 2% in 2011 compared with 2012. The value of motor fraud cases also fell in 2011 to £13.6 million, down by 7% on 2010. There were a total of 197 cases of motor finance fraud in the last quarter of 2011, and 815 over the year as a whole.

FLA member finance companies prevented around 7,400 cases of attempted fraud in 2011. This avoided £95 million of fraudulent deals, which helps keep finance costs down for car buyers.

Paul Harrison, FLA head of motor finance, said: “While it may be tempting to sell your car if you are in financial difficulties, if you do so without speaking to your finance company first then you may be classified as a fraudster.

“It’s important that the owner of the car – the finance company – knows who is driving that car at all times, as required under the terms and conditions of a credit agreement.

“As part of this week’s third annual Car Crime Awareness campaign, we are telling car finance customers about their rights and how to protect themselves against being the victim of fraud – or inadvertently committing fraud.”