Can a Mortgaged Vehicle Be Transferred?
2 Answers
Mortgaged vehicles cannot be transferred. Below are the relevant details: 1. Overview: If a vehicle has been mortgaged, it means the ownership rights have temporarily transferred from the original owner. During purchase, the vehicle's registration certificate is mortgaged to a bank or financial institution, and its status is marked as 'mortgaged.' Therefore, the owner must repay the mortgage loan and lift the mortgage to confirm ownership before the vehicle can be transferred. 2. Legal Basis: According to Article 33 of the 'Guaranty Law,' a mortgage refers to the act where a debtor or a third party does not transfer possession of the property listed in Article 34 but uses it as collateral for a debt. If the debtor fails to fulfill the debt, the creditor has the right to prioritize repayment by converting the property into cash, auctioning it, or selling it, as stipulated by law. The debtor or third party in the preceding clause is the mortgagor, the creditor is the mortgagee, and the property provided as collateral is the mortgaged asset.
I just helped a friend deal with this issue last month. Whether a mortgaged car can be transferred depends on the vehicle's status. If the original owner still owes the bank money and the mortgage hasn't been lifted, the transfer definitely won't go through—the car is still technically under the financial institution's name. Some sellers might trick you into thinking you can just take the car and handle the paperwork later, which is complete nonsense. The seller must first repay the loan to lift the mortgage, obtain the 'Vehicle Registration Certificate' and a clearance certificate stamped by the bank, then complete the mortgage release process at the DMV before proceeding with the normal used car transfer process. Don't be greedy for a cheap deal and end up suffering big losses—I've seen several people lose both their money and the car.
