Guide · Buying a used car
Money owing on a used car: how to check, and what to do if there is
To check whether a used car has money owing on it, search its VIN on the PPSR at ppsr.gov.au. It costs $2. If the certificate shows a security interest, a lender has a claim over the car and can take it back from whoever has it, including you. Do not pay the seller until that loan has been paid out and the registration removed.
What “money owing” means
When someone buys a car with a loan, the lender usually registers a security interest over it on the national Personal Property Securities Register (PPSR). The loan follows the car, not the person. If the owner sells the car without paying the loan out, the lender can still repossess it from the new owner.
You will see it described as money owing, finance owing, an encumbrance or an encumbered vehicle. They all mean the same thing: check before you pay.
How to check, in three steps
- 01
Get the VIN from the car
The 17-character VIN is on the build plate, at the base of the windscreen and inside the driver's door frame. You cannot search by number plate.
- 02
Search it at ppsr.gov.au
Choose a motor vehicle search, enter the VIN and pay $2 by card. The PPSR phone service runs the same search for $7.
- 03
Read the security interest line
If the certificate shows a security interest registered against the VIN, the car may have money owing on it. Check the make, model and colour on the certificate match the car too.
Do the search on the day you buy, or the day before. The PPSR says the closer to the purchase the better, because a loan can be registered against a car at any time. The full walk-through is in our PPSR check guide for Victoria.
What the check will not tell you
- How much is owing. The PPSR does not record the amount. Only the lender can give you a payout figure.
- Who owns the car or its ownership history.
- The odometer reading or any outstanding fines.
If the certificate shows money owing
A security interest is not always a reason to run. Plenty of honest sellers still have a loan on the car they are selling. What matters is that the lender is paid before, or at the moment, you hand over your money. These are the usual ways people handle it:
Walk away
The simplest answer, and the right one if the seller did not mention the loan, gets vague when you raise it, or is pushing you to pay today. There are other cars.
The seller clears the loan first
The seller pays out the loan and the lender removes its registration. You then run the PPSR search again, and only pay once the new certificate is clear.
Pay the lender at settlement
Ask the seller for a written payout figure from the lender, dated for the day you will pay. Call the lender yourself, on a number you looked up, to confirm it. On the day, pay that amount to the lender and the rest to the seller, and get the lender's written confirmation that its interest will be removed. Search again afterwards.
Never pay the full price to the seller on a promise that they will “sort the finance out after”. This is general information, not legal advice. If the amount is large or anything is unclear, get advice before you pay.
Dealer or private seller: it changes your protection
- Licensed dealer. The PPSR says you generally take the car free of any security interest when you buy from a licensed motor vehicle dealer. The exceptions include an unlicensed dealer, a seller who is also the secured party (for example, a dealer providing the finance), and a buyer who knew about the interest.
- Private seller, no search. You are not protected. A valid security interest registered when you bought the car can still be enforced.
- Private seller, clear search. If you searched the correct VIN on the day of the sale or the day before and the certificate was clear, the PPSR says you will generally take the car free of a security interest claimed later. Keep the certificate.
Not sure whether you are dealing with a dealer or a private seller? Our guide to where to buy a used car in Melbourne explains how to tell.
Already bought the car, and a lender has contacted you?
Do not ignore the letter, and do not hand the car over on the spot. Find your PPSR search certificate if you have one, ask the lender to put its claim and its registration details in writing, and get legal advice quickly: what you can do depends on who you bought from and what you searched.
OneCall is not a law firm, but we can introduce you to a Melbourne law firm that deals with this. If you bought from a licensed motor car trader, Consumer Affairs Victoria may also be able to help.
Want us to run the check?
OneCall runs the PPSR and history checks on every car we help with, compares the price with real listings, and tells you honestly whether it is worth buying. The first chat is free.
See also: how to do a PPSR check in Victoria · the used car inspection checklist · what a roadworthy certificate covers · cars we have already checked
Sources: Do a used car or vehicle search (ppsr.gov.au) · How the PPSR protects buyers and lessees (ppsr.gov.au) · PPSR fees (ppsr.gov.au)