By Luke Jovetic
Know Your Money Editor

In the past car background checks were only available to the trade but in recent years they have been made available to the public and they may be of benefit to your finances as well as your well-being.

The process is fairly simple and thanks to the internet the consumer has a choice of vehicle history check services to pick from.

More than one million UK buyers a year now pre-check cars before they part with their cash to find out if it has a hidden past.

Why are they important?

A Car Data Check provides finance and insurance organisations with fast, accurate and comprehensive vehicle history and identity information for use in their application processing and underwriting processes.

It can provide you with information about a car before you buy it, including if it's been reported as stolen, any police interest, whether it has been written off by insurance, import and export history, whether it has outstanding finance on it and more besides.

Around 160,000 cars are recorded as stolen by the police every year and more than half a million were written off last year, with almost a third of these deemed too dangerous to return to the road.

One of the biggest risks faced by used car buyers is outstanding finance, with 24 out of every 100 cars checked by HPI still subject to a finance agreement.

HPI warns: "If the loan remains unpaid when you purchase the vehicle, you will not acquire the title to it nor will you be protected by the Sale of Goods Act (1979). Checking with HPI first will help you avoid this all too common problem."

Theft is another issue that is regularly identified by HPI, they state: "HPI identifies nearly 30 stolen vehicles every day. Many get sold as 'bargains' to unsuspecting buyers who then have to return the car to its rightful owner.

"Checking with HPI means you'll reduce the risk of losing your money, by finding out if the car has any hidden history."

One in three cars have some form of hidden history so a car data check could help to make sure that you are not caught out or stuck with a problem caused by someone else.

The Home Office says: "You should check to make sure that the vehicle you are thinking of buying has not been stolen, seriously damaged or is still subject to finance.

"Any one who thinks that they are getting a bargain should ask questions about the car's authenticity. Why are you getting it so cheap? Does it have a history that you should be investigating?"

Kirk Fletcher, managing director of Experian's Automotive division, said: "The industry is reporting a dramatic increase in the number of people selling their cars without repaying the loans on them. Will you be left out of pocket because the car still has unpaid finance on it? Or worse still, could it be a car that is actually a write-off and deemed unroadworthy by insurers but sold on fraudulently to you?"

What are the options?

The checks need not cost a fortune and they could prove to be invaluable if they prevent you from purchasing a car with a bad history or provide you with the piece of mind that your new car is reliable.

HPI offers a single check for £19.99 and three vehicle checks for £29.97.

Similarly, the Experian AutoCheck is £19.99 for a single car and £24.99 for up to five cars.

An option that some people may want to consider is the AA Car Data Services, which provides a single car check for £20. However, those of you weighing up several options could benefit from its offer of up to five car checks for £25. This could provide those on the lookout for a new car with the option of checking multiple cars for just £5 each before they decide which they want to see.

All the major insurers tell the AA when they have written a car off and what category of write off it is.

They state: "We can even tell you if the car is currently recorded as stolen, or if a third party is concerned that it is being sold without their knowledge and they have recorded it as High Risk."

With the AA Car Data Services, if it turns out that there is an issue with the car which we should have spotted you will be covered for up to £30,000.