The amount of people flogging cars that they don’t actually own is on the rise. The value of car fraud cases exceeded £13.6m in 2011, with a significant proportion of that taken by so-called ‘conversion fraud’.Any car bought on finance remains the property of the finance company until all the payments are made, meaning that someone who sells a car with outstanding payments is selling a car illegally.

According to the Finance and Leasing Association (FLA), almost 40% of all fraudulent car finance deals in the last three months of 2011 were conversion frauds. It’s on the increase too – that’s 10% more than during the same period in 2010.However, overall car finance fraud, of all types, was down 2% in 2011 compared to 2010.

Paul Harrison of the the FLA said: “While it may be tempting to sell your car if you are in financial difficulties, if you do so without speaking to your finance company first then you may be classified as a fraudster. It’s important that the owner of the car – the finance company – knows who is driving that car at all times, as required under the terms and conditions of a credit agreement.”

There’s no excuse for buying a car with outstanding finance – it’s easy enough to find out the history of a car. The FLA suggests doing a history check on the car, using any one of a few companies that offer the service, including CDL, Experian and HPI.

Common sense should prevail – if the price looks too good to be true…you know what they say. Be sure to test drive a car before buying, too, and always meet a seller at a residential address. A pub car park is not an appropriate place to do a car deal.