Why Can't a Mortgaged Car Be Transferred?
2 Answers
Because the ownership of the car is still not in the hands of the owner, and the vehicle remains in a mortgaged state. In simple terms, there are still outstanding debts that haven't been cleared, so the transfer cannot proceed. More extended information is as follows: 1. Overview: Vehicle transfer refers to changing the name of the vehicle's owner, which is an essential procedure that cannot be omitted in the process of buying and selling used cars. When there are issues such as car accidents, failure to participate in annual inspections, stolen vehicles, or smuggled vehicles, the transfer cannot proceed through normal procedures. 2. Notes: When a vehicle is transferred from one city to another, the registration process to change the jurisdiction of the vehicle management authority is called a transfer of registration. Vehicle transfer of registration requires changing the license plate and the vehicle registration certificate, and the procedures must be completed at two different vehicle management authorities, including the procedures for the transfer out and the transfer in.
My friend bought a cheap mortgaged car last year, but the transfer process got stuck for half a year without success. The key issue is that the vehicle registration certificate (green book) bears the seal of the mortgagee, and the bank or financial company won't release it until they get their money. The DMV system immediately blocks the transfer channel once it detects the mortgage status. Some sellers claim they can bypass the mortgage and force a transfer, which is pure nonsense. The law clearly states that vehicle ownership is restricted before the mortgage is lifted—even if a sales contract is signed, you can only use the car but can't transfer its registration. It's like renting a house without a property deed; when real disputes arise, you’re the one left holding the bag. If you really want to buy a mortgaged car, make sure the original owner pays off the loan and gets a written mortgage release certificate—that’s the only safe way.
