Dealers are urged to remain vigilant following success in the fight against crime.

Lenders and dealers worked together to achieve a 2% year-on-year fraud reduction in 2011.

The sector saved £95 million by preventing fraudulent deals. Finance & Leasing Association data reveals that 7,388 attempts to secure cars fraudulently were stopped before finance was granted.

Conversion fraud – where an owner sells a car they do not own – accounted for almost 40% of fin-ance crimes in the last quarter of 2011, up about 10% year-on-year.

Lenders reported 815 cases of motor finance fraud.

More than half were after a customer took delivery of a car.

Last year there was one case of internal dealer fraud.

The FLA-funded police vehicle crime unit moved quickly to catch the offender.

Paul Harrison, FLA head of motor finance, said: “Rogue sales executives exist and help to facilitate fraud in showrooms.

"Dealers working with finance lenders have several tools to identify known fraudsters.”

The FLA urges dealers making routine checks to insist on seeing a full driving licence and scrutinise information from credit background checks.

Harrison said: “Dealers must continue to be vigilant in case a customer is applying for finance under suspicious circumstances.

“Showroom staff should check whether a customer’s name and address details appear correctly on all of the documentation they provide to support an application.”

Checking the history of a car can disclose important information on outstanding finance and whether it has been involved in an accident.

“If they buy used cars still on finance they don’t legally own them,” Harrison warned.