Rinty

Another thing to consider is that the seller may have a floating charge (called a "security agreement" in some jurisdictions) on all his property, securing credit facilities that may be in default. An attorney or co-operative banker would be needed to do the appropriate searches.

JimPA

Rinty,

In the US the way to perfect a lien on a vehicle is by the title. A security agreement doesn't accomplish that for vehicles but is often used as you describe to cover other assets, usually in commercial transactions.

Still, with all the facts here, it seems best to look for another car or bid for this one when it goes to auction.

Rinty

Jim:

Ah. None of the Canadian provinces or territories have motor vehicle title systems, so we do "serial number goods" searches and a "debtor name search" (in my province, anyway). In the case of my brother in law's Harley above, the security agreement showed up both under the seller's name, and under the VIN.

So, if an American is holding a clear motor vehicle title, is that conclusive proof that the vehicle is unencumbered?

JimPA

Yes, although there might be one exception. In the US we call it a "mechanics lien." An example might be an ad you sometimes see where Dinan or someone installed a bunch of upgrades. The buyer didn't pay and eventually handed over the keys. The same term applies to work your plumber or some other tradesman performed and you didn't pay, etc. S/he could then file a mechanics lien against your home. It's a special case that trumps the normal rules.

Rinty

Thanks. We call those garageman's liens.

rome

Wait for it to be repoed and then buy it from the lender for slightly more than they could reasonably expect to get at auction.