Can a Bank-Mortgaged Car That Cannot Be Transferred Be Purchased?

1 Answers
EllaLynn
07/30/25 5:28am
Second-hand mortgaged cars that cannot be transferred should not be purchased. Here is a detailed explanation: 1. Reason: During the mortgage period, the car is subject to a property claim right. This means that if the debtor fails to repay the debt when it becomes due, the creditor's mortgage right will be enforced, and the car will be used as collateral to settle the debt. Therefore, buying a car that is part of the collateral carries significant risks. 2. Legal Basis: According to Article 394 of the Civil Code, which came into effect on January 1, 2021: To secure the performance of a debt, a debtor or a third party may mortgage the property to the creditor without transferring its possession. If the debtor fails to perform the due debt or if the circumstances for realizing the mortgage right as agreed by the parties occur, the creditor shall have the priority to be paid with the said property.
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