KEY POINTS:
Car buyers are being warned to check if there is money owing on purchases, after an increase in complaints from new owners whose cars have been towed away.
AA technical advice manager Jack Biddle said complaints to the AA had risen from one every two months to one
every week from people who had not realised there was money owing on their car.
They realised only when the tow truck arrived because the previous owner had stopped paying.
Industry insiders told the Weekend Herald that increasingly more people were struggling to pay back car loans.
And while many sold the car and paid off the debt, some decided it was easier to pass the problem to someone else.
Clive Matthew-Wilson - editor of New Zealand car-buying manual The Dog and Lemon Guide - said new cars fell in value by 40 per cent in their first year, so a borrower could quite easily sell a car for less than he or she borrowed to buy it.
Turners Auctions spokesman Todd Hunter said repossessed cars being sold at auction had more than doubled in the year to September.
At the same time, the Motor Trade Association's Andy Cumming said private sales had increased, leaving more buyers at risk of a nasty surprise. Car yards are required by law to disclose if there is money owing on a car.
Chris Knight, the managing director of car history checking service Motorweb, opened his online checking service to the public this week because he said the increase in private sales was leaving more buyers at risk.
He said just over a third of the 500,000 checks he ran for car dealers each year showed money was owing on the car.
Mr Biddle said even doing a history check was no guarantee. An AA staff member had his car repossessed this year, even though he had checked its history.
The check showed money was owing, and the owner cleared the debt. But the car was towed because an earlier owner had another uncleared debt the staff member was unaware of.
Mr Matthew-Wilson said cars were being towed from new owners "all the time" and people did not seem to have learned to check.
MONEY OWING?
How to check
* Motorweb website: www.scarycars.co.nz. Will check whether a car has been stolen, deregistered, had the odometer wound back or has money owing.
* AA history check: www.aalemoncheck.co.nz.
* Or to check the Government's Personal Property Securities register for an outstanding debt, text the registration, VIN and/or chassis to the Ministry of Economic Development's TXTB4UBUY service. See www.ppsr.govt.nz/cms/searching-the-ppsr/txtb4ubuy.
