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Jul 28

What is a car HPI check?

Posted by:AutoMoney

Car HPI Check


When purchasing a second hand car, there are the usual things you look for – decent bodywork, no damage to tyres and lights, working engine, and a good interior are typical key points that indicate as to how the car has been looked after until now. But what about the paperwork? You’re likely to check it has a valid MOT, and ask about service history and any advisories. But these don’t give any indication as to whether there are any other issues, such as outstanding finance against the car that the previous owner may not have declared!
 

If you are buying a second hand car, you really should be checking with HPI

HPI stands for Hire Purchase Inspection (or Investigation) and is how you, or a dealer, can see whether a particular vehicle has any outstanding finance, is recorded as stolen, or has previously been written off.

When you consider purchasing a second hand car, carrying out a HPI check is something that you need to ensure you do BEFORE signing on the dotted line. And don’t think that buying from a dealer will mean that your potential purchase will automatically be HPI checked – it isn’t always the case. You must ask this question specifically and ask to see any records of the HPI check, if the answer is yes, including the date the check was carried out!

HPI checks use data from a number of sources including the DVLA, the Police, and financial companies, and can flag up a number of worrying issues, so it is critical you undertake this check before parting with any money, because once your name is on that V5, the car and any outstanding finance is yours!
 

Outstanding finance

Checking for outstanding finance is a very sensible step to take, before committing to a new car – if you were to purchase a car with outstanding finance on it, YOU may end up liable to pay it, or risk losing the vehicle! Unfair – yes, but so easily avoidable!

The majority of car finance deals mean that the finance company is granted an ‘interest’ in the vehicle - in other words has ownership of the car until the loan is fully repaid. However, if the agreement is not honoured and paid off by the previous owners, the finance company could come after the vehicle, regardless if it is now owned by someone else. They will reclaim the car in order to recover their costs, leaving the new “owner” out of pocket and without a car.

Most HPI checks cost money to carry out, typically £10-15, but we strongly recommend you carry out one of these checks before purchasing a second hand car – it could save you from some nasty surprises later down the road.

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We are PROUD MEMBERS of The Consumer Credit Trade Association. AutoMoney were forerunners in the creation of The CCTA Lending Code of Practice and we adhere strictly to its principles. Click here to view. ALWAYS MAKE SURE THE LENDER IS A MEMBER.

350.5%APR Representative
Representative example: Loan amount £1000. Duration 18 months. Repayable by 16 monthly repayments of £170.42 and one of £198.42 (includes Bill of Sale registration fee of £28) commencing two months from the date of the loan. Total amount repayable £2925.14. Rate of interest 187% per annum fixed. Representative 350.5%APR. LOANS ARE SECURED ON YOUR CAR. The vehicle may be repossessed if you do not keep up the repayments.