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What does a mortgaged car mean?

1Answers
CoraLynn
07/28/2025, 02:27:14 PM

Mortgaged car refers to a vehicle that is used as collateral for a debt by the debtor or a third party without transferring possession of the car. If the debtor fails to fulfill the debt, the creditor has the right to legally offset the debt with the car's value or through auction. Buying and selling mortgaged cars: Mortgaged cars can be purchased, but the mortgage must be released first. Before the mortgage is released, the car cannot be transferred. If purchased without releasing the mortgage, it essentially constitutes a form of sub-mortgage. Most mortgaged cars: For a mortgaged car to be transferred, the owner must sign a mortgage release agreement, which is often very difficult. Therefore, most mortgaged cars cannot be transferred.

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