Can a Mortgaged Car That Cannot Be Transferred Be Purchased?
3 Answers
Mortgaged cars with debt transfer rights can be purchased. Cars with debt transfer rights are purchasable because, during the mortgage period, the original owner cannot fulfill their debt obligations, and the mortgage company has to dispose of the car at a low price. This is because mortgaged cars are not about a sale relationship but a debt transfer relationship. After a car is mortgaged, it temporarily belongs to the mortgage company. Without the cancellation of the mortgage agreement, even if the car is purchased, it cannot be transferred. Below is relevant information: Debt assignment is non-formalistic: Once the creditor and the third party reach an agreement on the assignment of the debt, the debt assignment contract is established. Except where laws and administrative regulations require approval or registration procedures, no special contract form is necessary. Whether the debt assignment contract is in written form does not affect its validity. For debts that already have debt certificates, the delivery of the debt certificate is required, but this act is part of fulfilling the collateral obligation rather than a condition for the establishment of the debt assignment. Debt assignment is abstract: Debt assignment arises from various reasons, possibly based on sales, gifts, or substitution of performance, but regardless of the reason and its validity, it does not directly affect the validity of the debt assignment contract. This is the abstract nature of the creditor's rights. The purpose of this abstract nature is to ensure the security of debt circulation and the interests of bona fide assignees.
I was just about to talk about this topic—never buy a car with a mortgage that can't be transferred. There are too many risks. Last year, my neighbor bought a mortgaged car because it was cheap, but the bank came and repossessed it because he didn’t have ownership—the car wasn’t his property. Legally, such cars have unpaid debts, and creditors have the right to reclaim them at any time. Buyers end up paying but can’t drive the car, wasting their money. Even if the seller suggests signing a private agreement, it’s not legally binding, and disputes can become a headache. I recommend checking the vehicle’s mortgage status before buying, using official platforms or consulting professionals to ensure the debt is cleared before the transaction. Peace of mind is key—don’t lose big by trying to save small.
When a mortgaged car cannot be transferred, I think it's possible to buy but extra caution is needed. I once asked about such matters at an auto show, and the seller said the buyer could use the car directly, but the inability to transfer ownership means you can't license or resell it, affecting future use. If you insist on buying, you must get the seller to promise to clear the debt or provide a guarantee agreement, but in practice, there are many loopholes, making it easy to be scammed. I recommend checking the vehicle records to confirm there are no outstanding loans, or negotiating with the seller to handle the debt after payment before transferring ownership. Driving is stressful enough as it is—don’t add new problems.
