How to avoid buying a stolen or encumbered car

When you buy a car, you don’t always know its history – and we’re not just talking about the accuracy of the odometer!

More often than you’d think – or like – the car you’re about to buy could still have money owing on it. It could even be stolen.

And if you do end up with such an ‘encumbered’ vehicle, it could cause serious headaches for you down the line.

To save you the stress, here’s how to avoid accidentally purchasing a car that doesn’t quite have all its legal boxes ticked.

Do it yourself

When somebody buys a car on finance, the lender they get the money from will usually register that vehicle on the ‘Personal Property Security Register’, or PPSR.

This acts as a way for the lender to prove that they have an ‘interest’ in that vehicle. If the person who took out the loan stops paying, the lender can repossess it to recover their costs.

What that means for you is that if you buy a car with money owing, and the original owner stops paying their car loan, you could end up having that car you just bought repossessed! And then you’re down a car and however much you paid to the seller for it.

If a car has money owing on it, it’ll be on the PPSR. You can check it using the vehicle’s registration plate directly from the Government site, or through a third party like CarJam.

If it’s on there, be prepared and question the seller!

Stolen cars can be trickier. You can check to see if the car has been reported stolen through NZ Police, but there are times when the report of it being stolen may not have been made, such as the owner being on holiday.

A stolen car might also be given an entirely new identity through new plates, a forged registration card or even a new VIN.

In these cases, it can be tough to know if a vehicle has been stolen, barring something obvious like a broken lock or obvious tampering.

Going through a dealership

For peace of mind on the quality and legality of a new vehicle purchase, many people choose to buy a used car through a dealership instead.

Not only does this give you more legal protections than under a private sale, but you can be certain that the appropriate checks have been done by the dealership to ensure everything is above board for any used car they receive.

You don’t have to worry about it being encumbered by loans or legal status, plus you can be safe in the knowledge that the car must be sold Fit For Purpose – and if it isn’t, you can bring it back to the dealer for a refund.

There are no such protections from a private seller!

Summary

Buying a car encumbered by a shifty legal status or an equally shifty financial background is a risk that you have to take when buying a car privately in New Zealand.

While you can check the registration and details against Government and Police databases, these aren’t always a guarantee that the sale is completely kosher.

For full peace of mind, consider going through a vehicle dealer instead.

To discover your options in unencumbered used vehicles, get in touch with Nicholson Auto today.