How to protect yourself from buying a mortgaged car
How not to buy a credit car
Buying a car is an expensive business. Therefore, the purchase of a vehicle must be supported by the legal right to own a car. But often car purchase transactions involve the risk of fraud. In order not to lose both money and a vehicle, it is important to know how not to buy a mortgaged or credit car.
Cars at risk
The collateral is a guarantee of repayment of the debt to the borrower. The car may be pledged to a bank, pawnshop, leasing company, or a third party. The pledgor (owner of the vehicle) enters into a pledge agreement with the pledgee (creditor). The document is drawn up both for a car loan and for borrowing money for other purposes. In both cases, the car guarantees the return of money to the borrower or property pledged as collateral.
Such property, by court decision, is subject to transfer to the creditor if the borrower does not pay the debt. The new owner of the vehicle in this case is not protected by law, so he is left with nothing. Of course, it is possible to contact the police and, by a court decision, return the funds from the fraudster. But, as a rule, the procedure lasts for years and there is little chance of getting the money back quickly and in a one-time full amount. There are 5 rules to protect yourself from scammers.
Check with the traffic police and other services
The traffic police are often aware of the security or loan on the car. Therefore, deregistering a car with the traffic police together with the owner when selling a credit car provides the opportunity to obtain information about the loan. You can also check it with third-party services using the Internet (Register of notifications of pledges of movable property), which, as a rule, are publicly available and free. Before purchasing, you must check the car for theft, search, participation in an accident, and other prohibitions. The check is carried out on the official website of the traffic police and is free.
Studying the owner's PTS
A duplicate PTS may well indicate that the borrower has the original document, but the traffic police do not know about it. A replaced PTS with the mark “For loss of PTS” should alert you. The safest option is the one with the inscription “Instead of the returned vehicle title.”
Some PTS have a mark indicating that the vehicle was purchased on credit or lease. If there is such an inscription, you need to ask the owner for a certificate from the borrower about repayment of the debt. In other circumstances, it is worth asking the owner about the car’s credit history, whether there is a receipt from the car dealership, or whether there is a purchase and sale agreement. If everything is fine with the car, the owner will not hide information.
Additional documentation, information about owners
Cars that frequently change owners or are sold under a General Power of Attorney carry the risk of being collateralized property. If the seller is not the person indicated in the title, if the previous owners owned the car for 2-3 days and then sold it, you should not buy such a vehicle. It should also be noted that the CASCO policy, if available, contains information about the presence of a car as collateral.
Free cheese in a mousetrap
If the property owner offers a significantly reduced price compared to other market offers, you should be wary. Also, you should not include a reduced price in the purchase and sale agreement, even if the owner persistently asks for it. In the future, when going to court, it will not be possible to request a refund at the actual price purchased.
Carefulness when concluding a contract
When drawing up a purchase and sale agreement, you must carefully study each clause. A mandatory condition for signing must be the inclusion in the document of a record that the car is not pledged or seized by a bank, pawnshop or third parties. The contract must be kept throughout the entire limitation period (3 years).
It is impossible to protect yourself 100% from buying a credit car, but you can protect yourself as much as possible if:
- carefully examine the documents and conduct a check;
- study the seller’s personality;
- treat the purchase and sale document responsibly.
Buying a car mortgaged to the bank: how to do it right?
Buying a car is a serious and expensive matter. In order not to get into trouble when faced with fraud or due to ignorance of legal subtleties, it is enough to follow only a few simple rules, which, surprisingly, many neglect. Let's consider a standard situation: you have finally decided to buy the car of your dreams. But you don’t have enough money for a new car, or you think it’s unprofitable. One way or another, you decide to buy a car second-hand. You find an advertisement for the sale of the car you want, meet the owner, and you are completely satisfied with the condition of the car. But the car is pledged to the bank. Is it possible to buy such a car? What are the risks of such an acquisition? And how to protect yourself from unforeseen troubles?
If a car is pledged to a bank, this does not mean that it cannot be bought or sold. Schemes for transactions with pledged cars have existed for quite a long time, and citizens have successfully used them. The main thing you need to understand when agreeing to a deal with a mortgaged car is that it is on the bank’s credit balance. That is, the car seller, if he does not fully repay the loan during the transaction, through the same transaction transfers his obligations to the bank to the buyer, if the bank gives its consent to such an operation.
If you agree to the transaction, then it is better to carry it out at the bank branch that holds the car as collateral. In the first option, the seller must inform the bank that he is going to pay off his car loan early. To ensure that the car purchase is completed in accordance with all the rules, it is advisable to invite a notary to the transaction. The owner of the pledged car agrees with the credit institution (bank) and the notary on all issues related to documenting the transaction.
The procedure for repurchasing a pledged car from a bank is as follows: the parties sign a purchase and sale agreement, certified by a notary, then the buyer pays for the purchase, after which the seller fully repays the loan by depositing the required amount into the bank’s cash desk. The bank must release all liens on the car by filing a notice with the registry of notices of liens on movable property.
In the second option, the bank first approves the assignment of rights of claim in the amount of the remaining amount of the seller's debt to the bank for this car. The buyer and seller then sign a purchase and sale agreement, certified by a notary. If the cost of the car exceeds the amount owed to the bank, the buyer pays the difference to the seller. After completing all the documents, the bank submits a notification to the register of notifications on the pledge of movable property about the removal of the pledge from the seller and about the emergence of a new pledge on the same car, but on the buyer.
However, it may turn out that you buy a car that is pledged without even knowing it, and after a while you find out that you must either find the previous owner or pay off someone else's loan. If the owner kept silent during the transaction that the car was pledged, it is most often impossible to find it. And you, having spent money on the purchase, will either lose the car or will have to pay the bank money, essentially buying the same car for the second time. A notary can also help you avoid such an unpleasant situation. It is enough to come to him, having the VIN of the car you want to buy, and the notary will check in the register of notices of pledges of movable property, whether the car is pledged or not, and will issue you a document which will indicate that on a certain date and time the car was not listed in the pledge registry. This guarantees you that the bank will no longer be able to challenge your right to own this car, even if the car was pledged, the bank simply for some reason did not enter information about this into the register. You can check the register data yourself, on the website of the Federal Notary Chamber, but only thanks to a document from a notary, even if the car is still pledged, but the information has not been entered into the register, the bank will not be able to force you to pay someone else’s debt or take the car.
loans, commodity and commercial loans, loans, bank deposits, bank accounts or other borrowings, regardless of the method of their execution. a document granting a person the right to perform a certain action by a person whose consent is required to complete a particular transaction in accordance with the law. Notarized consents include: consent of the spouse to complete a transaction (both for the acquisition and alienation of property), consent to refuse privatization, consent to travel abroad of a minor child, consent of the owners (tenants) of housing for temporary registration. an official authorized by the state who has the right to perform notarial acts on behalf of the Russian Federation in the interests of Russian citizens and organizations (legal entities). legal entities and individuals who enter into or have entered into an agreement with each other. A party to the agreement may be the state (the Russian Federation, its constituent entities), which act on an equal footing with other participants in civil law relations. an agreement between two or more persons to establish, change or terminate civil rights and obligations.
How to protect yourself when buying a car - advice from experienced car owners
If you buy a car at a car dealership, you can feel safe. This material is intended for those who plan to purchase a used car at the car market or through an advertisement. How to protect yourself when buying a car second-hand, is it possible to drive without insurance, how to avoid getting cut and damaged by a car - AP has collected advice from experienced car owners, the State Traffic Inspectorate and banks.
Tips from experienced car owners
— After you have examined the external and internal appearance of the car and you are satisfied with it, carefully study the technical equipment passport. It must be the original, not a duplicate. Ideally, the car you are buying has one owner.
— Check the vehicle and engine numbers with those indicated in the documents.
— You can “punch” your car’s license plate number on the State Traffic Inspectorate portal. However, as reported on the website, there are no cars in the database that are pledged. This database has not yet been created.
— If you don’t trust the seller, write the full cost of the car in the sales contract. Most sellers offer to write down the price of the car in order to avoid paying tax. In this case, you can get a receipt from the seller indicating the amount you paid extra. Another option is to stipulate in the contract that the car is not pledged, etc., this is a weak, but still a guarantee of your success when going to court.
— The technical condition is best assessed by specialists. Buyers usually turn to friends, but a full inspection can be done at any service showroom for only 200 rubles. On the spot, if you find any shortcomings, you can bargain with the seller. Here the car will be checked for accidents and major repairs.
— If you doubt the seller, invite him to go and register the transport at the traffic police together. If a person refuses, it is better not to take this car - it may have registration restrictions.
How long can you drive without insurance?
You cannot drive without insurance. By the way, you shouldn’t trust “experts” on car forums in this matter - here we found information about a delay of both 5 and 10 days. As the AP was told via the helpline at the traffic police of the Amur region, if previously there was a right of deferment by law, now there is none. It turns out that after purchasing a car, you must immediately draw up a compulsory insurance contract. If traffic police stop a happy owner of a car without insurance, he will have to pay a fine of 800 rubles.
“Constructor” or “cut”?
Since 2009, Russia has significantly increased customs duties on the import of cars, as well as on the import of bodies, in order to reduce the number of imported construction kits - when the car is disassembled in parts and transported in the form of spare parts, and then assembled back. To avoid paying duties, enterprising businessmen began sawing the body, and then the so-called “cuts” poured into the Russian market. They were illegally (without passing through customs and paying the appropriate duties) imported into the country. As noted by the traffic police, sellers print fake documents and registration plates on cars and sell the car at a low price. Checking the police database is useless: in most cases, the car is not on the wanted list, and only a specialist can recognize forgery of documents.
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cars remained unfound in the Amur region over the past 5 years
Tips for checking a car:
— If, for example, the PTS requires an engine replacement, you should be wary. Pay attention to the date and place of replacement of units in the document. The designers worked until 2009. If the registration date is, for example, January 2008, then there is no need to worry. But if the year is 2009 and later, there is a risk that you have come across a so-called cut.
— It is possible to detect seams during a thorough inspection of the machine. Most likely, they will be seen in a service showroom.
— If the seller has a duplicate title, there is a risk that you have a “cut” in front of you - you will not find the car’s history in the duplicate.
— Compare the cost of the same brand of car with other advertisements for sale. If your option seems too inexpensive, this is another alarm bell. By the way, some online resources have calculators that allow you to calculate the real cost of a car, taking into account duties.
Traffic police: The purchase and sale agreement must be drawn up carefully
Often, all the buyer’s problems arise due to a negligent attitude towards the process of drawing up the contract,” says Maxim Kolesnikov, senior inspector for special assignments of the traffic police department of the State Traffic Safety Inspectorate of the Russian Ministry of Internal Affairs for the Amur Region. — Be sure to record the details of the car seller, and ideally, entrust the support of such transactions to lawyers or have them notarized. If it subsequently turns out that the purchased vehicle is stolen or has a “dark” past, the buyer will be able to challenge the validity of the transaction in court or recognize it as void, which will allow him to get back the money paid for the car. Ask the seller of the vehicle to go with you to the State Traffic Inspectorate. If possible, it is better to pay for the transaction after receiving the state registration plates. And most importantly: if they offer a low price for a car, this should be your first signal to think about purchasing this vehicle.
The risk of a used car is a guarantee
“How to check if a car is mortgaged to a bank?” - this topic is one of the most discussed on automobile forums. In this case, it is advised to contact your friends at banks. But there are many banks, and it’s unlikely to be possible to check everything. Another network user suggests paying attention to the following indirect signs of collateral: a car no older than 5 years, a “tasty” price tag, comprehensive insurance. As we found out, having the original passport of a technical device in hand is not a guarantee that the car is not pawned. For some organizations, a copy of the PTS is enough, others give a delay in providing the original.
“The only way out is to take a notarized receipt for the return of funds if the car is secured. Either draw up an agreement between individuals in front of witnesses or also have it notarized. Or just take a new car from the dealership. There is no third option, alas! - says another car owner.
By the way, if you intend to check your car through banks, it is not a fact that you will receive the information. Thus, as the AP was told in the Blagoveshchensk branch of Sberbank, “dissemination to third parties of information about vehicles that are the subject of collateral in favor of Sberbank of Russia OJSC to ensure the fulfillment of obligations of borrowers/mortgagors is contrary to the requirements of the law.” We are talking about Federal Law No. 395-1 “On Banks and Banking Activities”, in particular about Article 26 “Banking Secrecy”, which guarantees the secrecy of transactions, accounts and deposits of its clients and correspondents, as well as other information established by the credit institution .
How to protect yourself from buying a car that is mortgaged?
Today, a car loan has become a common transaction that allows you to acquire your own vehicle on favorable terms. In this case, the car must be pledged to the bank until the end of payments; it cannot be sold or given away. However, now there is an increasing risk of becoming a victim of fraud and buying a credit car. How does this threaten the buyer, and how to avoid buying a car with collateral?
The dangers of buying a car with a loan
The sale of mortgaged cars has become one of the most common types of fraud, since there is still no unified database of credit cars in Russia. You can contact a credit history bureau to check, but this method does not provide any guarantee: there are several such bureaus, and there is no guarantee that information about a given loan will be in this particular organization.
In addition, the legal side of this issue has not yet been worked out: it is unclear whether banks have the right to retain the title and who should be responsible for the mortgaged car.
Such a purchase is very dangerous for the buyer, since formally the credit car is collateral for the loan, and if it is not repaid, then the bank has the right to take away the car and sell it to pay off the debt. It doesn’t matter who the owner is at the moment, the car will be seized in any case. How does such a fraudulent transaction work?
- The attacker buys a car on credit, paying a minimum down payment or even without any investment of his own.
- In the shortest possible time, the car is sold to a trusting buyer, and not the original, but a duplicate of the title is presented.
- Naturally, the loan installments are not paid, the bank begins to look for a borrower, and then puts the car on the wanted list.
- At the nearest traffic police post, the car will be stopped and confiscated, and the new owner will have to either part with the car or pay off someone else’s debt, as a result of which the car will cost more than twice as much.
All the new owner can do in this case is to file a claim against the seller, but finding one can be very difficult. Even then, it will not be easy to prove the fact of fraud: often the buyer is offered to sign a contract for a lower value in order to evade taxes. If the buyer agrees, he will definitely not be able to get his money back.
Are there ways to recognize a credit car?
Buyers are wondering: how to find out whether a car is pledged or not? Automotive lawyers have developed several important rules that will help you avoid becoming a victim of deception.
First of all, you need to pay attention to the personality of the seller: ideally, it is better to buy a car either in a reliable dealership or from a good friend who will definitely not deceive you. Naturally, this opportunity is not always available, and you have to turn to private advertisements.
But even in this case, several details can be noted: is the seller in a hurry to complete the transaction, is he fussing? You can find out why he decided to sell the car in the first place, how long ago he bought it and other information.
If you feel that the owner is evading a direct answer or coming up with illogical excuses, it is better to refuse the deal.
However, intuition is not always the most reliable assistant, so you can use more objective signs of a dishonest deal. How to find out if a car is pledged?
- Be sure to check all documents for the car. The PTS should not contain the “Duplicate” mark; in addition, you need to pay attention to the date of its issue. There have been cases when traffic police officers, due to forgetfulness or malicious intent, did not put a mark on the passport to issue a duplicate, but the date will still show that it was received recently. If this date does not coincide with the age of the vehicle, it is worth considering.
- Special notes include how the car was sold. If there was a purchase and sale agreement, then the letters DCT will appear; if the car was bought on credit, then it will be indicated that it was purchased under an agency agreement. The standard term for a car loan is 3-5 years, and if less time has passed, it means the car was purchased on credit that has not yet been paid off.
- One of the surest ways to find out whether a car is pledged or not is that the car must be deregistered. The bank will not allow this, in addition, deregistration is a guarantee that the car is not stolen and is not wanted. Also in the traffic police you can find out about all the accidents in which she managed to be.
How to check if a car is pledged? The main thing is to trust your own common sense, and if there is even the slightest doubt about the reliability of the transaction, then it is better to refuse it.
Responsibility of the parties when concluding a purchase and sale agreement
When buying a car, how can you check whether it is a mortgage? It is important to carefully check all documents. The purchase and sale agreement states in a separate line that the car was not stolen or pawned.
The seller confirms this fact with his signature, and if he lied, this will become the basis for opening a case of fraud. The buyer must take a receipt for the entire amount paid.
Any car loan assumes that the purchased car itself becomes a guarantee of the return of funds borrowed from the bank, which is why the title must be kept in the bank.
However, now credit institutions, in order to attract new clients, often leave the PTS with the borrower, which simply opens it up to fraudsters. You will still have to buy the loaned car, so such a purchase could ultimately turn into a big disaster.
