Can a mortgaged car with a settlement certificate be purchased?
3 Answers
A mortgaged car with a settlement certificate can be purchased because the settlement certificate indicates that the vehicle does not owe any money to anyone, and the debt relationship is relatively simple, thereby reducing some risks. With the car in hand, the owner becomes the first creditor. According to some provisions of the Property Law, the owner will legally possess the vehicle. Settlement certificate: It refers to the written document provided by the lending bank after the owner has repaid the bank loan, proving that the borrower has completed the repayment of the loan. Related information: The "Loan Settlement Certificate" is required to go through the release procedures with relevant authorities (if a mortgage registration has been processed). Having a settlement certificate means that the loan for this car has been fully repaid, and the bank has issued the settlement certificate. There may be other reasons why the mortgage has not been released temporarily. If the original owner does not come forward, the mortgage cannot be lifted, which is the case for a mortgaged car with a settlement certificate.
A car with a mortgage can be purchased if it has a settlement certificate, but you need to be cautious. Having driven for decades, I've seen many such cases. The settlement certificate proves the original owner has fully repaid the debt, and the bank or lender no longer has a claim on the car. The issue is that some people forge these certificates—once you buy the car, the bank might suddenly come to repossess it, leaving you with nothing. So, before buying, you must thoroughly verify its authenticity: ask the seller for the original document stamped by the bank, call the bank directly to confirm, and ideally bring a knowledgeable friend to inspect it. Also, check the vehicle's history to see if there are any hidden debts. Once confirmed as genuine, complete the ownership transfer promptly—don’t delay. The advantage is that such cars are often cheaper, but don’t let the lower price blind you to the risks. Chatting about these things during routine maintenance can help others avoid pitfalls.
Of course you can buy a car with a mortgage clearance certificate. I've done it once myself. The price is super affordable, but don't rush into buying it impulsively. The key is to verify the certificate: if it's genuine, it means there's no debt left, and the car is yours. But there are many fakes out there, so remember to check the certificate against the bank's records, either by searching online or calling to verify. The transfer process can be a hassle—prepare the owner's ID, vehicle documents, and go through the process at the DMV. Pay attention to details during the process, such as whether the engine number and chassis number match. After buying, drive it for a while to ensure there are few issues before paying the full amount. For related matters like used car market scams, searching for cases online will give you a good idea. In short, just be cautious and don't let minor issues compromise safe driving.
