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How to Check if a Car Has Finance Owing?

Were you thinking of buying a new car? 🚗 Before you go ahead with the purchase, you'll want to ensure it doesn't have any outstanding finance from the previous owner. The last thing you want is to drive off in your shiny new car, only for the finance company to get in touch and ask for money you don't owe. Worry not, though. If you're wondering, "how do I check if a car has finance owing - free?", you're in the right place. We've got all the details below.

What is car finance?

When buying a car with finance, you borrow the money from a lender and pay them back over monthly instalments. It saves you from paying for the cost of the vehicle in one go and offers more flexibility over the types of cars available to you. 

Contract lengths typically last anywhere between 12 months and five years (though it is possible to get lengthier terms). And car finance is used to buy all sorts of vehicles, but the majority are second-hand ones

What are the different types of car finance? 

There isn't a one-size-fits-all approach to car finance, which is great news for consumers. You have plenty of choices when it comes to financing your next vehicle, but the three primary options include:

Hire purchase (HP)

Think of HP as the closest you can get to a mortgage when buying a car. You usually pay a deposit upfront and continue to make payments throughout the contract length. At the end of the agreement, you own the car outright. 

Personal contract purchase (PCP)

With PCP, you pay a small deposit on the car and borrow the rest, paying it off over the agreed terms. Then, at the end of the agreement, you have the option to make a balloon payment. This is the final amount of finance owed on the vehicle. However, there's no obligation to pay, and you can simply hand back the keys. Because of the balloon payment option, PCP usually has lower monthly payments than HP. 


Most people who buy second-hand cars do so with a loan, either from the bank or a specialist lender, like Carmoola. With a loan, you borrow the full amount and own the car outright while making payments each month to the lender until the loan is settled. 

What happens if a car has finance owing on it? 

You can have a problem on your hands if you find out a car has outstanding finance after you've bought it. The finance company may decide you now owe them money as you're the registered keeper, and you'll need to prove that you purchased the car without knowing of its finance issues. 

Fortunately, you don't need to find yourself in a position where you've just bought a new vehicle and realised it has outstanding car finance. Before completing the purchase, you can take action to ensure the car doesn't have any issues, and check  for any finance owing on the car 

How to check if finance is owing on a car

Most drivers will perform a car history check or  an HPI check before buying their vehicle. With an HPI check, you can see pretty much everything to do with the car from its registration date. This includes its mileage, whether it has an MOT, if it was stolen or in an accident, and, of course, if it has any outstanding finance owed. Most HPI checks cost around £10. 

Can I check if a car has finance owing for free?

If you don't wish to pay for the HPI check, there are other options, including using Carmoola. Before we offer you a finance decision, we'll ask you to enter the car's registration details you'd like to buy. From here, we'll perform a check to see if there are any problems with the vehicle, including if it still has outstanding finance. And best of all, it's completely free and part of the application process when you download the Carmoola app

No hidden surprises

Buying a car is a big commitment, and you don't want to have a major headache on your hands because you've purchased a vehicle that still has financing outstanding. So if you've been wondering how to check if finance is owing on a  car, now you know! Fortunately, with an HPI check or otherwise, you can see to it that your next vehicle purchase doesn't come with any problems and is free from any car finance owed by someone other than yourself. Then you can breathe a sigh of relief! 😌

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