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Why you should always make sure any outstanding finance is settled before buying a second-hand car

Used cars can be a great buy, whether you purchase from the motor trade or a private seller. Buying last year’s model with a few miles on the clock can save you hundreds of pounds, perhaps even thousands. However, buying second-hand comes with its own risks.

financePrivate purchases are usually cheaper than buying through a dealer, but many buyers prefer the reassurance of going through a trade seller. Remember, though, that even buying from a dealer cannot always protect you from problems. It is always wise to check the history of a second-hand vehicle as thoroughly as you can.

Checking documentation like the service book, the V5, and any MOT certificates, can provide clues in the case of discrepancies in mileage, which might have been altered to increase the value of the car.

Other potential problems with used cars include cosmetic repairs covering serious accident damage, and cars which have been written off by insurance companies. While such a car may be safe to drive, it may invalidate your insurance policy.

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Sometimes second-hand cars turn out to be stolen property, and are taken away from their new owners with no hope of any compensation. Less well known is the risk of buying a car with outstanding finance.

If the previous owner bought the car under a hire purchase agreement, then sold it on before repaying the amount in full, the debt is transferred to the new owner, who could potentially be held liable for repaying the remainder of the loan. In most cases, however, since the new owner knows nothing about the money owed and thus no payments are made, the finance company simply repossesses the vehicle. They may knock on the new owner’s door, or leave a note, but some unlucky drivers only discover the problem when they report their vehicle as stolen.

If the car came from a dealer, it may be possible to recover some of the money spent on it through Innocent Purchaser Protection, on the grounds that the new owner was unaware of the car’s history. This process can take time, however, and is not guaranteed to reclaim the full, or any, amount. There is no compensation for wasted time, or for the inconvenience and expense of being without a car.

An HPI check can prevent many types of vehicle related fraud by checking a car’s registration number against a large database to discover its history. The service costs around £20. Getting the check done can save a great deal of money and time further down the line, and is worth doing even when purchasing a car from a dealer.


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