What is a pledged car? What implications for a sale? How to raise a pledge on a vehicle? Pledge and used car loan, what should we expect? So many questions that must be answered before committing.
Pledged car: what does it mean?
There is generally a little confusion between the designation of pledged car and of pawn car in prefecture. The fact that the pledge is not registered at the prefecture does not mean that the car is not pledged. Staking a car means that a person, generally a borrower, undertakes to hand over the pledged vehicle if he is unable to execute the contract which binds him to his creditor (credit agreement with the financial institution).
In other words, it is not because the auto credit organization does not register a pledge in the prefecture, that the vehicle is not pledged. Basically, a car is pledged from the moment when the initial credit agreement (which was used to buy the car the first time) contains a clause indicating that the lender must be asked for the right to resell the car. This is particularly the case for new auto credit.
Point of vigilance when buying a car
When buying a used car, the seller is supposed to provide a certificate of non-pledge administratively called certificate of administrative situation. This certificate of non-pledge must be dated less than 15 days. It attests to the absence of registration of pledge on vehicle, and a certificate of absence of opposition to the transfer of the registration card.
NB: if the seller of a used vehicle is unable to provide this document, it is probably due to an administratively pledged car. To verify this, it is possible to obtain a certificate of non-pledge free of charge on the website of the Ministry of the Interior: request for a certificate of non-pledge. (you still need to have some info from the registration card).
However, it is therefore possible to obtain a non-pledge certificate for a pledged car! It all depends on whether the initial credit organization has registered the pledge in the prefecture or not. This certificate is therefore not an absolute guarantee that there is no pledge linked for example to the first credit contract which was used to sell the car. So you have to be careful when you want to buy or sell your car with an outstanding loan.
On the other hand, when you buy a used car on credit, financial institutions and banks no longer take a pledge (generally it is a credit contract not allocated to the sale). This administrative lock costs them money. However, a pledged car that they would come to seize in the event of a problem with repayment of the used car loan would not bring them much money compared to the age of the pledged vehicle.
This is also the reason why used car credit is a little more expensive than new car credit. It is therefore even more necessary to compare the best used car loan rates.
How to raise the pledge of a vehicle?
In order not to block the sale of a pledged car… the pledge must be lifted. For this, there are not 36 solutions, the bank or the credit company having registered the car pledged at the start must have it raised in the prefecture. Until this is done, you should not buy the pledged vehicle.
You should not buy a pledged car otherwise you expose yourself to a significant risk. Indeed, if the seller of a used car has not yet finished repaying his car loan and there are repayment problems, the initial credit organization will be entitled to seize the car. The purchaser of the second-hand vehicle can therefore have his car seized when he has purchased it quite honestly.
Tips when buying a used car
- Obtain a certificate of no pledge of less than 15 days from the seller
- When negotiating, try to find out how the seller bought the car initially and whether the car loan has been repaid.