Sheet FCL · Item 05 of 06The used car
When a PPSR search shows a security interest registered against a used car, the PPSR says this usually indicates there is money owing on it, and that going ahead with the purchase can put the buyer at risk of the car being repossessed. Its advice to a buyer is to talk to the seller first, and to ask them to have the registration removed before buying.
General information, not legal advice. How to run the search itself, when to run it and what it costs are on the PPSR’s used car search page. This page starts where the search ends. The register’s own site, ppsr.gov.au, is published by the Australian Financial Security Authority.
For the buyer, the PPSR’s first step is a conversation with the seller, and a request that the registration be removed before the sale. For the seller, the next section sets out what the Credit Code says about selling a car that is security for a loan.
The PPSR says a seller who believes a registration is an error, for example because the car loan has been paid in full, can contact the secured party who made it, usually the lender, whose contact details are on the search certificate, and ask for it to be removed. If that does not work, its formal route is an “amendment demand” sent to the secured party’s address for service, with the registration number, the request, the person’s name and contact details, and the giving of notice identifier if one is shown. After at least five business days without removal, the person can apply to the PPSR for help, which the PPSR says has no cost, or to a court.
The PPSR says this means the serial number is not unique. Where there is a registration, the secured party can be asked to confirm whether money is owing on the particular vehicle, and it may agree to give a letter confirming what its registration relates to.
The PPSR’s first check is that the right VIN or chassis number was entered, and a fresh search on the correct one if not. If the number was right, it advises caution, since details not matching is one possible sign that the VIN or chassis number has been altered, and suggests an online registration check with the state or territory road transport authority.
If the search lists the car as a statutory or repairable write-off, the PPSR says it may be a good idea to find out more before buying it. It names some risks of buying a written-off car: difficulty getting it roadworthy, registered or insured, and a lower value.
If the results show any stolen vehicle indicators, the PPSR’s instruction is to “proceed with caution”. It warns that a buyer who buys from a private seller a car later found to be stolen may lose both the car and the money paid for it.
Where the National Credit Code covers the seller’s loan and the car is mortgaged to secure it, the Code says the seller must not dispose of the car without the credit provider’s consent or a court’s authority. The Code adds that “the credit provider must not unreasonably withhold consent or attach unreasonable conditions to the consent”. Among the conditions it may set, the Code lists remedying any breaches, and an agreement under which the person taking the car becomes personally liable for the amounts due under the mortgage.
The other way out is paying the loan off. A borrower may pay out a credit contract at any time, and on a written request the lender must give a written statement of the payout figure as at a date the borrower names, within 7 days. The payout amount can include early termination charges where the contract provides for them.
The PPSR lists information a search does not provide:
So a registration says that someone has claimed an interest in the car, not how much is owed, and a clear search says nothing about the kilometres.
The PPSR treats a car bought from a motor vehicle dealer differently from one bought from a private seller, and sets out when a buyer takes the car free of a registered security interest, with the exceptions, on its page How the PPSR protects buyers and lessees.
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