FLA warns against sub-hiring financed vehicles

Car buyers have been reminded of the legal problems attached to sub-hiring vehicles that have been purchased using motor finance arrangements.

The Finance & Leasing Association has marked the start of Car Crime Week by spotlighting the 17 per cent rise in motor finance fraud cases seen in the first three months of 2011.

It was revealed that 45 per cent of these cases pertained to instances of people taking credit out to purchase a car, before hiring it out to other drivers - often strangers - in order to make a profit.

The FLA warned that this practice is illegal because until the finance deal has been paid off, the provider still legally owns the car and has authorised only the credit applicant to drive the vehicle.

Paul Harrison, the FLA's head of motor finance, said it is therefore vital to "advise your dealer if anyone else will be driving it and that during the life of the agreement you remain in possession of the car at all times".

According to figures released last month, forecourt finance is the most common way to pay for a new car, with more than 54 per cent of buyers choosing this option in March 2011.

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