Is it possible to buy a mortgaged car that cannot be transferred?
4 Answers
It is possible to buy a mortgaged car that cannot be transferred. Below is a detailed explanation of purchasing a mortgaged car: 1. Reasons: During the mortgage period of a car, there exists a claim of real right on the car. This means that if the debtor fails to repay the due debt, the creditor's mortgage right will be realized, and the car will be used as collateral to settle the due 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, the debtor or a third party may mortgage the property to the creditor without transferring the possession of the property. 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 right to be paid preferentially with the said property.
When it comes to mortgaged cars that cannot be transferred, I strongly advise against trying to save money by buying one. Having worked in the automotive industry for over a decade, I've seen too many people fall into this trap: a buddy of mine bought a mortgaged car at a low price, thinking he got a great deal, only for the bank to show up and repossess the car within three months. Since the ownership still belongs to the bank if the car loan isn't fully repaid, you can't complete the transfer even if you purchase it—you're just temporarily using the car. The risks are enormous: if the car is taken back, your money is gone; in case of an accident, disputes are endless, as insurance and annual inspections require the original owner's cooperation, and if they don't answer the phone, you're stuck; legally, you have no protection—if the original owner disappears, you can't even win a lawsuit. For safety, it's better to spend a bit more on a legitimate car with transferable ownership so you can sleep soundly at night. Remember, cheap deals often hide big pitfalls—for long-term use, peace of mind is what matters.
From a daily driving perspective, buying this kind of car is really not cost-effective. I once tested a friend's mortgaged car and felt anxious all day long: the price was slightly lower, but getting insurance was too difficult—many companies require the owner's proof, and if it's not you, you can't get insured. During annual inspections, you also need to find the original owner's documents, which is a hassle. Parking on the roadside makes you worry about it being towed, and driving on the road keeps you on edge. Moreover, if the original owner fails to repay their debts, the car could be repossessed at any time, resulting in a total loss. I've seen many complaint posts on forums where beginners think they're saving money but end up with small savings and big troubles. For a safe and worry-free journey, it's best to directly choose a second-hand car or a new car that can be transferred—peace of mind and safety are what truly matter.
From a legal perspective, you should absolutely never buy a mortgaged car that cannot be transferred. If the car loan hasn't been cleared, the ownership remains with the original owner and the bank. Purchasing such a vehicle means you have no ownership rights, and the bank can repossess the car at any time. If a dispute arises and goes to court, as the buyer, you'll be in a very passive position—losing money and wasting time. I've studied cases where people, tempted by low prices, ended up having the car repossessed, losing both the vehicle and their money. Don't take the risk by betting on luck; it's best to avoid such deals altogether.
