Motoring body the AA has warned consumers never to pay cash for a car as this leaves them open to fraudulent behaviour by traders.

A fifth of 137 consumers surveyed by AA Car Data Check would pay three-quarters of the value of a ‘dream purchase’ car in cash, while 14% of those surveyed said they would pay the entire amount in cash.

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The AA has cited several pitfalls with cash payments, namely, the risk of a car dealer disappearing with the money or the lack of proof-of-purchase available when paying with cash. Instead, it is advising customers to pay for vehicles with a banker’s draft or by online payment transfer.

‘Clean up’

The AA has recently launched an online portal for consumers to buy used cars with the stated aim to ‘clean up’ the trade, and offers a vehicle history check with purchases.

The check should identify if a car has been stolen, or has an insurance problem or outstanding finance against it.

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Also operating provenance-checking systems, Experian Automotive found 27% of the three million used vehicles checked in the first quarter of 2012, and 10% of motorcycles reviewed by vehicle data check firm HPI in 2011, had outstanding finance against them.

To protect against this, Experian launched a finance alert automation update to its checking tools in April this year, while HPI has continued to invest in its own provenance systems.

richard.brown@timetric.com