These days it is quite common to buy a used car by responding to an online ad. Apart from ensuring that the car is in a mechanically acceptable condition, what legal issues can arise?
A major concern is to ensure that there is no money owing on the car to a finance company. The owner of the car is under no legal obligation to tell you. Even if the owner tells you no money is owing, you must check for yourself. The finance company retains the right to recover the car until it is paid in full.
This can be done by searching the national Personal Property Securities Register (PPSR), which records security interests in all types of personal property including cars, to see if the car is debt free or stolen or has been previously written off.
It is, unfortunately, not unusual for an unsuspecting car buyer to not make the PPSR enquiry only to have the car repossessed a few days or weeks later by the finance company or the Police. Imagine forking out tens of thousands of dollars for your new car and being left with nothing.
So, avoid the pain, don’t rush and make the PPSR search when you buy a used car. You’ll sleep better at night!
October 2023