What is Motor Vehicle Mortgage Registration?
3 Answers
Motor vehicle mortgage registration refers to the process where the owner of a motor vehicle uses the vehicle as collateral and applies for registration with the traffic management department of the public security authority where the vehicle is registered. Methods to cancel motor vehicle mortgage registration: 1. Present the motor vehicle registration certificate, identity documents of the mortgagee and mortgagor; 2. Fill out the motor vehicle mortgage or mortgage cancellation registration application form, affix the official seal of the unit, and process at the relevant counter. Materials required for vehicle mortgage procedures include: 1. Identity documents of the mortgagor and mortgagee; 2. Motor vehicle registration certificate; 3. The principal contract and mortgage contract legally entered into by the mortgagor and mortgagee. After completing the mortgage registration, the vehicle cannot be freely rented or sold.
Last year when I bought a new car through financing, I personally went through the vehicle mortgage registration process. Simply put, it means using your car as collateral to borrow money from the bank. This requires a trip to the DMV to complete registration formalities. They'll annotate the mortgage information on your vehicle's green book (the vehicle registration certificate), which then stays with the bank as security. During the loan period, although you're driving the car, full ownership doesn't belong to you. If you fail to repay the loan, the bank has the right to repossess the vehicle. Only after fully repaying the loan and presenting the bank's release documents to the DMV can the mortgage be completely lifted, allowing you to retrieve a clean green book. Mortgage registration provides security for lenders while imposing constraints on car owners, so it's crucial to carefully consider before signing any auto loan agreement.
My cousin works in auto loan services at a bank, and he told me that mortgage registration actually establishes a tripartite legal safeguard relationship. When you borrow money using your vehicle as collateral, the vehicle management office records the borrower's information, the bank's details, and the mortgaged vehicle's data. This makes banks more confident in lending because a registered mortgaged vehicle cannot be privately transferred—it's like putting a digital shackle on the car. If the borrower fails to repay on time, the bank can directly apply to auction the vehicle based on the registration proof. However, regular car owners should note that after mortgage registration, annual vehicle inspections remain unaffected; only transactions or scrapping require the mortgage status to be lifted first. Nowadays, many apps can check vehicle mortgage records, so be sure to check if a used car has hidden loans before purchasing.
