Part of being a smart buyer is knowing what you’re getting into, especially when making a high value purchase. For example, when buying a used car in Ontario, know whether you’re getting into a used car that has a lien or other outstanding claim against it. This can be done by performing a Personal Property Security Act Search.
Why Perform a Personal Property Security Act search?
As stated by the Ministry of Small Business and Consumer Services, “If a lender has rights in the used car and a search is not done, the car could later be seized if the borrower fails to repay the loan. Consumers do not need to search when buying a used car from a registered motor vehicle dealer in Ontario unless the car is worth more than $15,000.”
Thus, performing a Personal Property Security Act Search (also known as a PPSA) will uncover whether a used car seller, or former owner, still has obligations attached to the used car in question.
A PPSA search will determine if an outstanding loan remains. If you discover that the loan has been repaid, insist that a ‘loan discharge’ be provided and ‘registered’ by the used car seller. If the loan has not been repaid, buyer beware. There are a number of third party Personal Property Security Registration Providers in Ontario that will provide this information for you at a relatively low cost.
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