Insurance group Aviva yesterday paid £120m for car checking business HPI, handing the firm's private equity owners a £50m profit in just 14 months.

Aviva's Norwich Union Insurance division is paying £118.5m in cash and £1.5m in loan notes to Phoenix Equity Partners, which bought HPI from 3i in June last year for £70m.

Based in Salisbury and established in 1938, HPI is used by car dealers and private buyers to check whether a car has any outstanding finance owed on it and to authenticate its ownership. It also reveals whether the car has been involved in a serious crash or has been reported stolen.

It has a 60% market share - private buyers pay about £30 to check HPI's database, while dealers pay around half that.

Since Phoenix acquired HPI, it has worked with its management team to develop Exchange, an online service that allows dealers to advertise cars for sale.

Its sales grew by 36% to £22.5m in the two years to March 2004, and it is estimated that it will post pre-tax profits of £10m during this year. Its net assets are estimated to be worth £6m.

A spokeswoman for Norwich Union Insurance said the purchase would see the company moving closer to the likes of the AA, and to becoming a "one-stop shop" for motorists.

She added that HPI would remain a stand-alone brand and its 191 staff are to remain in their locations.