When buying a used car, you expect to drive it away with peace of mind, but if there's money owing on the vehicle, your dream purchase can quickly turn into a nightmare. A registered security interest can have serious consequences for you as the buyer.
Understanding Registered Security Interests
A registered security interest means that a lender has a claim over the vehicle, and if the debt is not paid, they can repossess the car from you, even if you've paid the seller in full. This is because the debt is attached to the vehicle, not the seller, and the lender can exercise their rights as the interest holder.
The search result will show that an interest is registered and who registered it, but it won't reveal the amount owed. This lack of information can make it difficult for you to negotiate with the seller or assess the risk of buying the vehicle.
Consequences of Buying a Car with Money Owing
If you buy a car with money owing, you risk losing the vehicle if the seller doesn't pay out the debt. You won't take on the seller's debt, but you could still end up without a car. To avoid this, it's essential to check for registered security interests before you buy.
Here are some key points to consider:
- A lender can repossess the car from you if the debt is not paid
- You won't be notified if a new interest is registered after you've bought the car
- You could lose the car even if you've paid the seller in full
Dealing with Registered Security Interests
If a PPSR search reveals a registered security interest, you have a few options to consider before buying the car:
- Ask the seller to pay out the debt before you buy the car
- Negotiate the price of the car to reflect the outstanding debt
- Walk away from the sale if you're not comfortable with the risk
It's crucial to deal with the issue before you buy, as it can be more complicated and costly to resolve after the sale.
Checking Again on the Day of Payment
Even if you've checked for registered security interests earlier, it's essential to check again on the day you pay for the car. This is because a new interest can be registered at any time, and you want to ensure that you're aware of any changes before you finalize the purchase.
By taking these steps, you can minimize the risk of buying a car with money owing and ensure that you're making an informed decision.
* Delivery time. Reports are issued within minutes while the Personal Property Securities Register is available. The register has scheduled maintenance windows, set out in our Terms & Conditions. A search requested during a maintenance window is issued as soon as the register reopens.
† Free finance-change alerts. Where finance (a security interest) is recorded against the vehicle at your search, for 14 days we check with the PPSR every hour whether those details have changed, and tell you if they have. Where no finance is recorded, there are no alerts. The PPSR doesn't say what changed; a new search, at the normal price, shows the current details. Stolen and written-off records are not included.