How to buy a second-hand car

With used-car scams on the rise because of the recession, we explain your rights and the many pitfalls

Lauren Thompson

The second-hand car market has become even murkier in the past year, consumer groups have warned, with cloned cars and forged documentation becoming increasingly common in the recession.

Last week the Office of Fair Trading (OFT) began an investigation into the market after Consumer Direct, the watchdog, received a record 68,000 complaints last year. Frank Shepherd, of Consumer Direct, says: “We are receiving more complaints than ever about dodgy car sellers. From false documents to defective parts, there are plenty of pitfalls to avoid.”

The prices for used cars fell towards the end of last year but have now recovered, according to Parkers.co.uk, the car information website, making it even more important for consumers to obtain the best deal.

Richard Headland, of Which? Car magazine, says: “The more you look into the used-car market, the murkier it gets. It is a minefield for consumers. Many people simply have no idea whether or not what they are buying is legitimate.”

Here we identify the main pitfalls and explain how to avoid them.

Stolen and cloned cars

More than 170,000 cars were stolen last year, the Home Office says. If you buy a stolen car, you risk losing the vehicle and your money.

Mr Shepherd says: “The police can take a stolen car from you to return it to the original owner or the insurance company. You will not receive any compensation, even though you bought the car in good faith.”

Car cloning is also increasing. This involves stealing a car and changing its identity before selling it on. Criminals replace the numberplates and vehicle identification number (VIN) with the identity from a legitimate vehicle of the same make, model and colour. Cloning can also have serious consequences for the owner of the original, legitimate car, because they can find themselves held responsible for speeding or parking tickets in places they have never visited.

The best way to avoid stolen or cloned cars is by checking the vehicle registration document (V5C). Buyers should not proceed with the sale until this document has been produced and they have checked it carefully.

Mr Headland says: “Stolen or forged documentation is relatively easy to obtain. Fake registration documents can be bought for about £200 and the real thing, stolen from the DVLA, costs about £500.”

Buyers should check that numbers on the V5C match the car’s number plate, engine number and VIN, which is usually found in the engine compartment. Make sure that none of the numbers have been tampered with.

If you do inadvertently buy a stolen or cloned car, you are likely to run into problems when making an insurance claim. Niki Bolton, of eSure, the insurer, says: “If the vehicle was stolen, this would be identified when a policyholder made a claim. While we would cover all third-party costs, it is unlikely that we would pay for any damage to the vehicle because it is not the policyholder’s property.”

If a vehicle has a numberplate starting with Q, which means that the identity of the vehicle is unknown or it has been built using several used parts, it will be very difficult to obtain car insurance.

Cars owned by a credit company

One in four checked vehicles still has outstanding finance, according to HPI, the organisation that performs checks on vehicle histories. Helen Saxon, of the Finance and Leasing Association, the trade body, says: “If money is owed on a car by a previous owner, the car still belongs to the finance company and can be taken from the new owner at any time. This is why it is very important to get a vehicle check on any used car you are considering buying.”

These checks, which can be carried out online or over the phone, cost about £20 and tell the buyer if a vehicle has been stolen, cloned, written off or has any outstanding finance. It normally includes a guarantee. HPI, for example, provides up to £30,000 financial reimbursement if a car turns out to have unforeseen problems.

Defective cars

Mr Shepherd says that most of the complaints received by Consumer Direct relate to faulty cars. “Common problems include a leaky gearbox and faulty clutch,” he says. “The obvious advice is to view the car in daylight, take it for a test drive and take someone else with you if you are unsure about cars.”

Clocking, where the mileometer is turned back to reduce the number of miles shown, is a big problem and costs consumers £100 million a year, according to the OFT. If the mileage appears low but wear and tear on the car looks heavy, there is a chance that the car has been clocked.

Mr Shepherd says: “Check MoT certificates and service documentation for mileage readings. Previous owners named on the V5C should be able to tell you what the mileage was when they sold the car.”

It is important to research the market value of a car by using a website such as Parkers.co.uk. If you are paying less than 70 per cent of the market price, the car is more likely to be defective, stolen or cloned.

Write-offs

It is also important to check if a car has already been “written off” by an insurance company. Ms Saxon says: “If a vehicle has been declared a total loss, or write-off, it has almost certainly been involved in a big accident. Many can be repaired safely, but others will always be unsafe.”

Write-offs have four insurance categories: A and B refer to very damaged vehicles that should not be allowed back on the road, while C and D generally refer to older vehicles with minor damage that can be repaired.

Ian Crowder, of the AA, says: “If you go ahead with the purchase, you must tell your insurer. It may not affect premiums, but you are likely to receive very little if you make a claim. Also perform, or pay for, a mechanical inspection — an MoT certificate is not sufficient — to ensure that the car has been repaired to a high standard. The vehicle’s market value will have been reduced considerably, so do not pay the full price.”

Know your rights

Consumer rights depend on whether the car is bought from a dealer, at auction or privately.

If buying from a dealer, you are covered by the Sale of Goods Act 1979, which states that goods should be of satisfactory quality and fit for purpose. If they are not, you can demand redress. Look for an established dealer with a good reputation and make sure that it is a member of the Retail Motor Industry Federation, which offers a conciliation and arbitration service. Consumer Direct recommends choosing a dealer with a quality-checking scheme, such as Ford Direct or Vauxhall’s Network Q.

You can find bargains at auction or privately, but you may not be covered by the Sale of Goods Act and have little hope of redress if something goes wrong. The buyer enters into a contract with the owner of the goods, not the auctioneer, and it can be difficult to track down the owner later.

Mr Headland says that consumers should also be wary when buying privately. “Many traders pose as private dealers to shirk their responsibilities to the customer,” he says. “If you do buy privately, always say that you are calling about ‘the car’ and be wary if the seller asks ‘which one?’. Make sure that you view the car at the seller’s home, not a public place, and that the seller’s phone number does not appear in several advertisements.”

Case study

Paul Hughes, above, of Stoke-on-Trent, was poised to splash out £11,000 on a used Nissan Navara when he discovered that it was actually a cloned car.

The 48-year-old entrepreneur says: “I saw the car in Auto Trader and it seemed reasonably priced; not low enough to cause alarm. I went to the seller’s house to view the car, which was in reasonable condition. The paperwork all seemed fine, so I made an offer. The seller insisted that I paid cash because he claimed to be having problems with his bank.”

But before Mr Hughes handed over the money he carried out a vehicle check with HPI for £19.99. An adviser pointed out that there was no issue number on the V5C, which meant that the documentation was probably forged. Mr Hughes says: “Sure enough, HPI called back and confirmed that the car was a clone. I told Auto Trader, which withdrew the advertisement. The vehicle check was £20 well spent and stopped me losing £11,000.”

Mr Hughes, who also contacted the police, adds: “I found the legitimate car online through a Nissan garage so I was able to warn the owner.”

Buyer’s checklist

Find out the car’s market value by using a website such as whatcar.com or parkers.co.uk.

Ask to see the V5C, MoT certificate and insurance policy.

Call the DVLA on 0870 2411878 to check that the V5C is genuine.

Perform a vehicle data check with a company such as HPI or the AA.

Consider taking an independent, qualified examiner to check the vehicle. The AA’s comprehensive inspection costs about £240.