Automotive

lien questions (looking for advice)

  • Last Updated:
  • Sep 15th, 2018 3:14 am
[OP]
Newbie
Sep 13, 2018
2 posts

lien questions (looking for advice)

Im looking at a used car from an omvic registered dealership and the carproof I ran today shows that there is a lien on it with a bank. The dealership told me that the car was repossessed from the original owner (due to non payment to the bank) and that there should be no lien anymore. They also produced a letter from the bank saying that there was no lien on it anymore.
I called the bank myself and they are saying that the lien is still active and that the loan went into collections. The bank gave me the number to the collection agent, however they are out of office until monday.

Could this just be an clerical issue where the lien was not released? if the car was repossessed shouldn't the lien have been cleared by the bank?
I realize that I would be protected by OMVIC as registered dealer can not sell a car with a lien, however would prefer not to deal with any potential headaches.
Last edited by red2893 on Sep 15th, 2018 12:16 am, edited 1 time in total.
6 replies
Deal Expert
User avatar
Jul 30, 2007
21083 posts
5964 upvotes
Toronto
Does not make sense.

How did the dealer have this repossessed car in their lot ?
If dealer bought this car thru auction, then dealer would have paid the auction seller and in turn, auction seller paid the bank or collection company and subsequently a lien release would have been issued. Dealer should have followed up with the auction seller or bank to ensure the car is lien free.
Deal Fanatic
Jun 11, 2005
6490 posts
1132 upvotes
Mississauga
If it isn't the deal of the century walk.
Deal Fanatic
User avatar
Mar 23, 2008
6918 posts
3920 upvotes
Edmonton
red2893 wrote:
Sep 14th, 2018 5:04 pm
Im looking at a used car from an omvic registered dealership and the carproof I ran today shows that there is a lien on it with a bank. The dealership told me that the car was reprocessed from the original owner (due to non payment to the bank) and that there should be no lien anymore. They also produced a letter from the bank saying that there was no lien on it anymore.
I called the bank myself and they are saying that the lien is still active and that the loan went into collections. The bank gave me the number to the collection agent, however they are out of office until monday.

Could this just be an clerical issue where the lien was not released? if the car was reprocessed shouldn't the lien have been cleared by the bank?
I realize that I would be protected by OMVIC as registered dealer can not sell a car with a lien, however would prefer not to deal with any potential headaches.
The letter from the bank should have had a name on it, no? Maybe even a phone number?

Personally, it wouldn't be worth the hassle to me to deal with headaches. Either the dealer shows a clear title, or you stay away.

You can do a lien search here:
http://www.ppsa.ca/ppsaca/

Think it costs around $20.

C
[OP]
Newbie
Sep 13, 2018
2 posts
booblehead wrote:
Sep 14th, 2018 7:12 pm
Does not make sense.

How did the dealer have this repossessed car in their lot ?
If dealer bought this car thru auction, then dealer would have paid the auction seller and in turn, auction seller paid the bank or collection company and subsequently a lien release would have been issued. Dealer should have followed up with the auction seller or bank to ensure the car is lien free.
The dealer bought the car from auction.

yes my understanding is thatt once the vehicle was repossessed by the bank and sold on auction, any difference between the auction price and balance of the loan would still fall to the original person, however the actual lien on the vehicle would be clear as it wouldnt transfer over to the auction purchaser(dealer) and/or anyone that buys the car from the dealer. which is why im thinking it might be a clerical error by the collection agency to not release the lien after the car was seized. i guess the best course of action is the check with the dealer and collection agent on monday. thanks for the responses.
Jr. Member
Aug 26, 2018
191 posts
125 upvotes
red2893 wrote:
Sep 15th, 2018 12:21 am
The dealer bought the car from auction.

yes my understanding is thatt once the vehicle was repossessed by the bank and sold on auction, any difference between the auction price and balance of the loan would still fall to the original person, however the actual lien on the vehicle would be clear as it wouldnt transfer over to the auction purchaser(dealer) and/or anyone that buys the car from the dealer. which is why im thinking it might be a clerical error by the collection agency to not release the lien after the car was seized. i guess the best course of action is the check with the dealer and collection agent on monday. thanks for the responses.
I'd walk. Unless it is unrealistically cheap and used as a winter beater.

Think about the kind of person who defaults on their loan. Guaranteed these people are kinda trashy and certainly likely to treat their car like crap. Also, there are people who will knowingly screw the car up once they know the repoman is coming to take it back. Just watch youtube for examples.

Had a similar experience. I was tagging along on a used car hunt once. This was a legit new car dealer mind you. There was a car in their used inventory that was $4k below what everyone else charged for a similar mileage and year. So gave it a cursory test drive. The car sounded different for sure, based on engine noise, compared to other cars tested thus far. Upon closer inspection, it had scratch marks all over the trunk and had some cigarette burns. The car smelled funny too. Then we asked for the carproof and saw a lien as well. Like you, thought it was weird and was guaranteed by the dealer it was dealt with. And yet it's there on the carproof which they provided. Not worth the risk. So we walked, and then he ran after us asking if we'd be interested if there was a better offer on top and agreed to the sale right away. Said no and left. Not worth the trouble. For sure that car was owned by some trashy person who pushed the car hard and left the car in a really bad state.

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