What is a Mortgaged Vehicle?
1 Answers
Mortgage refers to a situation where the debtor or a third party does not transfer the possession of the property (i.e., the motor vehicle) 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 either discounting the property or auctioning/selling it according to legal provisions. In simple terms, it means that Party A's motor vehicle is mortgaged to Party B as a form of guarantee. When a motor vehicle serves as collateral, it is referred to as a mortgaged vehicle. Below is relevant information: 1. For a legitimate mortgaged vehicle, both or all three parties involved should register the mortgage with the motor vehicle registration authority (i.e., the local vehicle management office). The registration record can be displayed in the 'Motor Vehicle Registration Certificate' (this document has a dedicated page for mortgage registration, which includes the mortgage period, validity, and records of changes or cancellations). Generally, it is advisable not to purchase a mortgaged vehicle during the mortgage period or before the debt is fully settled, as this could pose risks. 2. When buying a mortgaged vehicle, always check the mortgage registration details in the 'Motor Vehicle Registration Certificate.' If the latest mortgage registration has been canceled, it indicates that the vehicle's secured debt has been fulfilled, and it is no longer a mortgaged vehicle, making it safe to purchase. If the mortgage registration has not been canceled, the vehicle management office will not process the transfer of ownership. When purchasing a motor vehicle with canceled mortgage registration, promptly complete the transfer procedures at the vehicle management office to avoid potential repossession or theft by the original owner or the financing institution after purchase.
