What does a creditor's car mean?
3 Answers
A creditor's car refers to a vehicle that has been mortgaged, where the owner has not redeemed it, and the vehicle is resold or the creditor's rights are transferred. More details are as follows: 1. A creditor's car is also known as a mortgaged car. Since a creditor's car cannot be transferred, but can undergo normal annual inspections and legally drive on the road, its price is cheaper than that of a used car. Essentially, a creditor's car belongs to a lending institution or bank. If the mortgage is lifted, the mortgaged car can be traded normally. If the mortgage is not lifted, purchasing a mortgaged car carries significant risks. 2. There are two types of mortgaged cars: one is a bank-financed vehicle, and the other is a vehicle mortgaged to an individual or company. Such vehicles should be chosen carefully when purchasing, as some mortgaged cars may suffer greatly in terms of performance and lifespan. 3. Things to note when purchasing a creditor's car: After purchasing a creditor's car, the buyer only has the right to use the car, not ownership. Before the bank or individual mortgage on the creditor's car is lifted, even if the car is purchased, it cannot be transferred. Therefore, the buyer only has the right to use the car, not ownership. 4. A mortgaged car can undergo regular insurance and annual inspections. As long as it is through proper channels, a mortgaged car is the same as any other vehicle.
Last time I researched used cars, I specifically looked into lien vehicles. These cars still have outstanding loans, with the vehicle mortgaged to a bank or lender. The original owner might have defaulted and disappeared, forcing the lender to repossess and auction the car to recover losses. While the price of such cars seems tempting, the risks are high—because legally, the true owner is the lender! A friend of mine bought one cheap, only to have it towed away after six months, losing all his money. If you're considering buying, you must check the 'Motor Vehicle Registration Certificate' for any mortgage markings and ask the seller for a loan settlement certificate. Never trust verbal promises—this kind of bargain is the easiest way to step on a landmine.
Back when I worked as a car salesperson, I often encountered customers inquiring about repossessed vehicles. To put it bluntly, these are cars bought with loans that got taken back before the monthly payments were completed. Dealers acquire them from finance companies at low prices and resell them at 20-30% below market value. But the key is to determine whether it's a pledged vehicle or a mortgaged vehicle: pledged vehicles have their keys and registration certificates held by the dealership, allowing you to check for traffic violations; mortgaged vehicles with incomplete documentation are even more troublesome. Last week, a customer caused a scene outside our shop, claiming his repossessed car got towed away in the middle of the night. Honestly, I'd advise ordinary folks to steer clear of these vehicles—the paperwork is too complicated, and transferring ownership can be a nightmare.
