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How to check if a car has finance owing

Peter Terlato avatar
Peter Terlato
- 5 min read
How to check if a car has finance owing

Buying a used car can be a relatively simple process, however, it’s important that you don’t simply trust the seller and do your own research to learn everything about the car you’re planning to purchase.

You wouldn’t want to purchase a stolen vehicle or one that’s been written-off. Nor would you want to buy a car that has outstanding finance owing on it.

Some car dealerships may provide you with a free registration check. Private sellers may not be as generous or inclined. This is because, surprisingly, private sellers have no legal obligation to disclose any outstanding financing on vehicles they’re selling. This means that you might unintentionally purchase a car with existing debt, and these financial obligations may subsequently become your responsibility.

The financial institution that provided the car loan retains a financial interest in the vehicle until the loan is fully settled. They possess the legal authority to demand repayment from the vehicle's owner, which could potentially be you, should you not exercise caution. In the worst case scenario, you could face repossession and sale to cover any outstanding debts.

How to check finance owing on a car

To determine whether the used car you're considering buying has any outstanding financial debt, you can perform a search on the PPSR (Personal Property Securities Register). PPSR reports provide essential information, indicating whether the vehicle is stolen, declared as a write-off, or has any outstanding finance owing, among other details.

You can access this information by visiting the PPSR website. While it's not entirely free, the cost is relatively minimal, at just $2 per online vehicle search. You can also utilise their assisted phone service, which costs a little more at $7.

You can pay using a credit card or debit card but be aware that search fees are non-refundable, so make sure you enter the correct information when searching.

It's a good idea to do a PPSR search on the day or the day before you plan to buy a car. The closer you do the search to the purchase, the better. This way, you'll have the most current information and give yourself extra protection against the risk of repossession.

What information do I need to provide?

You’ll need to enter the Vehicle Identification Number (VIN) or chassis number of the car you’re inquiring about in order to perform a search, so have this information handy. VINs and chassis numbers are a mix of letters and numbers.

Most cars built before 1989 will have a chassis number, while those built after 1989 will typically have a VIN (17 characters in length). You’ll normally find either:

  • Under the bonnet or in the engine bay
  • At the bottom of the windscreen (inside)
  • Inside the door closure area on the driver’s side
  • On the road registration papers

What type of vehicles can you search for?

You can discover information on a range of different types of vehicles including:

  • Cars
  • Motorbikes
  • Caravans, campervans and camper trailers
  • Horse floats, trailers and boat trailers
  • Buses, trucks, forklifts, tractors and all-terrain vehicles (ATVs)

When you perform a PPSR search, it will inform you of pertinent information pertaining to the vehicle you’re researching, such as:

  • Whether or not the vehicle has a recorded security interest - if so, this means there may be outstanding debts associated with the car, and it could potentially be repossessed.
  • The car’s registration status
  • Written-off statusMake, model and colour
  • Compulsory Third Party (CTP) insurance provider

You’ll receive a search certificate, which acts as proof of the data returned in a search result, and admissible as evidence in a court or tribunal.

However, a PPSR search won't provide you with the following details:

  • Remaining loan balance on the car
  • Any outstanding fines
  • Odometer reading
  • Ownership history

What to do if you discover a security interest on a used vehicle?

If you perform a PPSR check on a vehicle you’re considering purchasing and find out that there may be outstanding finance owing on the vehicle, it may be sensible to avoid going through with the sale.

You may consider informing the seller of your search results, although you’re not obliged to tell them. They may or may not be aware of this information. You may also wish to inform the advertising agency, website or platform where you saw the car ad, so that they’re aware that the vehicle might have finance owing on it.

You can offer up a copy of your search certificate as evidence of this discrepancy.

What other checks can I perform when buying a car?

See below for other things you can do to guarantee that the vehicle you’re intending to buy is safe and ready to drive. Additionally, you may want to consult our guide on what to consider when buying a used car through private sale.

Road registration check

Many state and territory road transport authorities provide online registration checks based on the car's licence plate number. This can supply you with the car's registration expiration date, as well as details about its make and model.

Mechanical inspection

Reach out to your local roadside assistance or motor traders association in your state or territory for a trusted vehicle inspector recommendation. Have the inspector verify these key aspects:

  • Ensure the car's serial number is unaltered.
  • Validate that the odometer readings in the car's service manual are both accurate and consistent.
  • Evaluate the overall condition of the vehicle.

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Product database updated 22 Jun, 2024

This article was reviewed by Personal Finance Editor Mark Bristow before it was published as part of RateCity's Fact Check process.