What To Do When PPSR Says Finance Owing?

Ulysses31 on 12/04/2023 - 17:41
Last edited 12/04/2023 - 17:56

Hi guys,
I've got no real history buying second hand. 1 car from Dad ~2010, 1 from my uncle ~1995, 1 from trading post ~1993.

Wasn't aware about PPSR, or issues with property being financed or written-off etc. How can a seller pay it off before the sale? (yes, I understand they might use the cash afterwards for gambling/other stuff etc)

Bought a 2 year old caravan off facebook, excellent condition. Only used a few times. Sensible price.
Went to the seller's home & business as well. All seems 100% legit & above board. Legit profiles for whole family, nothing weird.
I get a completely normal "read" on the seller. Friendly, helpful, not rushing, no weird stuff.

Paid majority via internet banking & $2k cash. I had SOME sense to get a written receipt, and we both took photos of each others license etc.

But I didn't think to get the VicRoads forms filled & signed on the spot… and didn't know about PPSR.

I just did a PPSR check, and it says it's under finance with a major australian lender.

Am I screwed? What steps now?

EDIT: I forgot to mention… I don't believe I can insure it (?) as it's not in my name.

Automotive

Comments

  • bobbified on 12/04/2023 - 17:53
    +5

    Did you ask the seller? They may have recently paid it all off and the lender just hasn’t removed their interest yet.

    On the other hand, if money is actually still owing on it, it becomes your liability and if it’s not paid, the lender can repossess the caravan to recover their money. If that happens, you’ll need to try recover your own money from the seller (via agreement or civil proceedings).

    • Muzeeb on 12/04/2023 - 17:56

      I recall it can take up to a few months for some finance companies to pull their finger out.

      1 from trading post ~1993.

      Thanks for the trip down memory lane. Much simpler times back then. I often wonder how much money Telstra lost from that acquisition.

      • jaimex2 on 12/04/2023 - 18:19

        It takes 5 business days max these days.

        • Muzeeb on 12/04/2023 - 18:29

          My recall is starting to degrade. Dang! That also means my wife is right - again.

        • thatonethere on 12/04/2023 - 22:28

          Yeah - took mine about 5 days to clear which was a real pain.

      • brad1-8tsi on 14/04/2023 - 21:50
        +1

        I often wonder how much money Telstra lost from that acquisition.

        More than $600 million over 11 years ownership.

  • Bargainitis on 12/04/2023 - 17:55

    oh man… there are more knowledgeable OZB on VIC rules but my basic understanding is in private sales, the buyer inherits the liabilities once the paperwork is processed.

    In a more typical and above board fashion, the proceeds that the seller receives goes to extingush / reduce their liabilities, releasing the PPSR hold / caveat.

    In your instance - subject to view of others - the seller may simply pocket the proceeds while passing on the liability to you. Do you have any documentation stating that you are buying the vehicle on a debt-free basis? or anything of that phrasing?

    Don't panick yet as there may be outs but I would start retracing your steps and see what written confirmations you have. Also the PPSR could also be outdated (seller may have paid it down already and system hasn't reflected it yet).

  • deme on 12/04/2023 - 18:06
    +1

    What To Do When PPSR Says Finance Owing?

    Don't buy it

  • jaimex2 on 12/04/2023 - 18:25
    +1

    Step 1 is to ask the seller if they paid all the finance.

    The record takes about 5 business days to update.

    If you get the feeling this is dodgy call your bank now and tell them you were scammed.

    It can get messy from here is they're not going to pay it. If you hold the caravan keep it somewhere it can't be repossessed and wait it out.

    They'll keep going after them as the debt is in their name.

  • Wiadro on 12/04/2023 - 18:41
    -5

    you own the loan on it now.

    • Muzeeb on 12/04/2023 - 18:44
      +7

      No. OP owns a van that a finance company can reposses and auction off to pay for the seller's loan.

  • AngoraFish on 12/04/2023 - 21:23

    I once had a dealer second hand car fail the PPSR. Turns out the car had been purchased under finance, the finance was paid off, but due to the weirdness of interest rate calculations 3c had been put back on the loan account after it was cleared. Not surprisingly, the dealer organised with the finance company to waive.

  • Venustrap87 on 12/04/2023 - 21:28

    you only paid the deposit right..? no transfer of ownership yet?

  • Malik Nasser on 13/04/2023 - 09:41
    +1

    Unless the seller has already paid out the loan in full and PPSR has not yet been updated, then the cost to you will be the sellers price + finance outstanding.
    People need to learn to do their due diligence before entering contracts. Looks like you may be stuck learning the hard way this time.
    If you are looking to purchase something, and it has finance owing, then you need to reduce the final payment to the seller by the amount of finance owing.
    The loan is secured by the asset, so if the loan isn't repaid the lender can repossess the asset to cover the outstanding loan.
    If you have already purchased this, all you can do now is hope and pray.
    Speak with the seller and mention the PPSR report with finance owing. If the seller has paid it off in full, see if he can provide some paperwork as proof. If the seller tells you it still has finance owing, then I don't think you have much recourse. It is a private sale, and the onus is on you to do your due diligence prior to purchasing.

  • MELso on 13/04/2023 - 23:09
    +1

    For future reference, if there's finance owing, contact the financier and get a payout figure. Cut two cheques (or make two payments): one to the financier for the payout figure and the balance for the seller.

    You might be able to get your bank to reverse the internet banking transfer, but there's no guarantee.

    If that doesn't work, you'll have to reach out to the financier and get them to remove their interest from the PPS Register, and they almost certainly won't do that unless you pay any amounts outstanding.

    • lordra on 14/04/2023 - 08:32

      Great advice.!

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