What can go wrong
The PPSR search shows money owing: what to do next
5 min read
A registered security interest does not always mean walk away, but it does mean do not pay yet. How to get it cleared safely before you buy.
Stop before any money moves
If the search shows a security interest registered against the car, do not pay a deposit or the price until it is cleared. A promise that the loan will be paid out after the sale is exactly how buyers lose both the car and the money.
It is not always a car loan. The certificate names the secured party, which may be a lender, a leasing company or a business with a security over its assets. Whoever it is, the interest stays attached to the car until they remove it.
The safe way to buy a car with finance on it
It can be done, in this order:
- Ask the seller for a payout letter from the lender: the exact amount that clears the loan, and the date it is good until.
- Confirm the letter with the lender directly, using contact details you find yourself rather than the ones printed on it.
- Arrange for the payout to go to the lender, and only the balance of the price to the seller.
- Wait for the lender to remove its registration, then search again and keep the clear certificate before you take the car.
When to walk away
If the seller will not get a payout letter, cannot explain the interest, or owes more than the price you agreed, walk away. So should a seller who pressures you to pay before it is cleared: the pressure is the warning.
If you have already paid
Contact the secured party named on the certificate, and get advice from your state's fair trading office or a lawyer. If you searched by the car's serial number before you bought and nothing was registered, the law generally protects you. If the interest was registered when you bought, it usually does not, which is why the search comes first.
Common questions
- Can I buy a car that has finance owing on it?
- Yes, if the finance is paid out and the lender's registration removed before you take the car. Paying first and trusting that it will be cleared later is how buyers lose it.
- Who removes a security interest from the PPSR?
- The secured party that registered it, usually the lender, once the debt is paid. Search again before you hand over the balance, and keep the clear certificate.
- Is a security interest always a car loan?
- No. It can be a lease, or a business's security over its assets. The certificate names the secured party, and they are who to ask.
Check the car you are looking at
Enter an Australian plate or 17-character VIN. Run an instant free identity check, then add the official register searches this guide is about.
