Northern Ireland car insurance customers have been reminded to run background checks on used vehicles they're considering buying, following research showing nearly 40 per cent of motor finance fraud cases between July and September this year were carried out by people selling cars they did not own.

Figures from trade body the Finance and Leasing Association (FLA) also highlight that around a quarter of fraud instances involved applicants giving false information on their finance application forms.

However, Paul Harrison – the association's motor finance head – reassures Northern Ireland car insurance customers that, so far in 2009, motor lenders have prevented at least 8,500 fraudulent deals worth £100 million.

He notes that motor finance companies are constantly working to save car insurance customers money, make the country's roads safer and stop criminals by tackling fraud, although the recession has led to an increase in the number of people selling vehicles before they settle their outstanding finance.

"Whether fraudulent or mistaken, this kind of car sale can cause distress for the third-party buyer," he observes. "I would urge anyone interested in buying a used car to run a car background check to ensure it is free of finance before purchasing it."