Purchasing a car is one of the largest financial transactions a person will make in their lifetime. But there are significant risks associated with buying a vehicle, especially if you are purchasing a used car from a private seller.
The main risk when buying privately is that the car may have finance owing on it. Buying a car privately requires a person to rely upon their own judgment because there is no guarantee that the vehicle is unencumbered. This is unlike buying from a dealer who has an obligation to guarantee there is no money owing on a car.
The simplest way to ensure that a vehicle is unencumbered before buying it is to complete a Personal Property Securities Register (PPSR) vehicle search. A PPSR search will let you know if the car you are thinking about purchasing is being used as security for a debt or other obligation.
What is the PPSR?
The PPSR is a national online database that allows people to check if there are security interests registered against personal property. Personal property includes things such as cars, boats, motorbikes, machinery, tools and intellectual property (but land and buildings are not included).
Undertaking a PPSR search is important because someone may try and sell you a car without telling you they still have finance owing on it. When a person purchases a car with money owing on it, they become liable for that debt. This is because the debt attaches itself to the car, not to the person who originally took out the loan. If you do buy a car with money owing on it the bank or finance company could repossess the car from you to cover the debt.
Another advantage of a PPSR search is that it will inform you if the vehicle has been reported as stolen or written off. Purchasing a car that has previously been written off can cause problems when it comes to registering and insuring the car.
When you conduct a PPSR search before purchasing a car it will also give you peace of mind knowing that the car is unencumbered and that you have clear title if you one day want to sell the car yourself.
How to do a PPSR Search
It costs only $2 to conduct a PPSR vehicle search and you can do this by visiting the official government website at https://www.ppsr.gov.au/