When you’re shopping for a vehicle, you get used to checking the tyres, examining the interior and maybe taking a few for a test drive to see how they feel on the road. But even the most thorough of these checks can miss something very important: Whether there’s money owing on the car you’re planning to buy.
If a lender still has a security interest registered on the vehicle, or if there is a loan outstanding, it can mean that the car can still be repossessed if the prior owner stops paying what they owe, even if you’ve since bought the vehicle, fair and square.
A PPSR check is a quick and easy way to avoid this, and can save you a lot of stress and money in the long run. Here’s what you need to know about what a PPSR check is, what it includes and why it is essential if you’re in the market for a used vehicle.
What Is a PPSR Check?
PPSR refers to the Personal Property Securities Register, which you can find at ppsr.companiesoffice.govt.nz. A search costs $2 plus GST. You can check the register to see whether anyone is holding a security interest over items of personal property, including motor vehicles.
This is where you’ll see if a finance company or other lender is holding a vehicle as security on a loan. This check tells you nothing about the mechanics of the car, but it can give you peace of mind that it won’t be repossessed from you if you buy it.
A PPSR check also won’t tell you whether a vehicle has been stolen. You can use the NZTA’s system to check who is registered as the owner.
Why is a PPSR check important?
The primary reason that most buyers use the PPSR is to find out whether there is still money owing on a vehicle they are considering buying. It will show you whether a lender has registered a security interest. A clear check can give you more confidence about a private sale and means you’re unlikely to have your vehicle repossessed by a lender still owed money from a prior owner who has stopped paying the loan.
What does a PPSR check show?
The check will usually give you any registered security interests, details of any finance owing on the vehicle, the details of the secured party – if there is one – the registration date and any collateral information that is linked to the VIN or chassis number.
This is particularly helpful for private sales. Dealers have different rules. They are required to tell you if there is any finance owing on a vehicle, and if they do not, the lender cannot repossess the car.
What a PPSR check doesn't tell you
A PPSR check is a very helpful tool as part of the buying process, but it won’t tell you about the mechanical condition of the car, any accidents it has been in, the accuracy of the odometer, what servicing or maintenance has been done, or whether the vehicle is stolen.
Sites like carjam.co.nz can help you to dive a little deeper.
When should you get a PPSR check?
There are lots of scenarios where it may make sense to get a PPSR check.
Before buying any used vehicle
It’s always worth getting a bit of extra peace of mind. Private sellers aren’t legally required to tell you whether there is money owing on a vehicle.
Before you pay a deposit
A good time to conduct the check is before any money changes hands.
Before you arrange vehicle finance
You may strike trouble if you try to take out finance on a car that is already being held as security by another lender.
How to complete a PPSR check
You’ll get the most accurate report if you can provide the vehicle’s VIN, chassis number and registration plate. This will allow you to complete a search on ppsr.companiesoffice.govt.nz. Read the resulting report carefully, and if there are any registered security interests, make sure these have been discharged before you go through with the purchase.
What If a vehicle has money owing?
If you find out that money is owing, it doesn’t mean you have to give up on the vehicle. You can ask the seller to provide proof that the finance has been repaid, and ask them to contact the lender to have the interest discharged.
Don’t assume that they will take care of it with the money they get from the sale. Postpone the purchase until you can get a clear report on the vehicle.
Other checks you should do before buying a used Car
There are a few other checks you might choose to do before you buy a car, to ensure you know what you’re purchasing.
Vehicle history report
A vehicle history report will give you a comprehensive account of a used vehicle’s history based on its unique VIN or license plate. It will give you information about things like accident damage, the odometer, and whether it’s been registered as stolen.
Mechanical inspection
An inspection by an independent expert mechanic can help you identify any issues that might be looming. This can give you a chance to factor the likely cost into your purchase decision, and plan for the potential repairs if you decide to go ahead with the purchase.
Service history
The seller may be able to give you information about the service history of the vehicle. If you know this has been done regularly, it may help you feel reassured that care has been taken of the vehicle.
Warrant of fitness
Cars can be sold “as is where is” without a warrant of fitness, but they cannot legally be driven on the road without one.
Registration status
Similarly, cars can be sold without registration, but the seller needs to tell you about this, and you can’t drive the car on the road until you register it.
Recall checks
You could also check with the manufacturer whether the vehicle you’re looking at is subject to any current recalls.
Test drive
Finally, if you find a car you’d like to buy, it often makes sense to take it for a test drive. This gives you a chance to see how it feels on the road, and whether you’re comfortable driving it.
Buying Through a Dealer vs Private Seller
You may be trying to decide whether to buy your vehicle from a dealer or a private seller.
There can be benefits and drawbacks to each.
Dealer
- Consumer protections may apply. Dealers have to be listed on the Motor Vehicle Traders Register. They are also bound by the Fair Trading Act and Consumer Guarantees Act. This gives you some recourse if the car doesn’t turn out to be what you expected, or if there are problems with the purchase.
- Dealers often complete some vehicle checks before sale. That may mean you don’t have to conduct as many of the checks yourself.
- Buyers should still complete their own due diligence. Dealers are not allowed to mislead you when they give you information about a vehicle, but it’s always a good idea to satisfy yourself of what you’re buying, too.
Private Seller
- Buyers take more responsibility. Private sellers are not subject to the same laws as dealers, but you may still have some rights if you were persuaded to buy a vehicle based on false information.
- A PPSR check becomes even more important. You’ll need to make sure the seller doesn’t still have a loan on the vehicle. Additional vehicle history checks are also usually recommended.
- You may find that you are able to access a cheaper price privately, in part reflecting the fewer protections that come with buying privately.
A PPSR check is one of the simplest checks you can do when buying a vehicle. It’s cheap and easy to do and can save you major headaches. It will show you whether there is outstanding finance still owing on a car, or whether anyone has registered a security interest against the vehicle. If you can combine a PPSR check with a mechanical history check, as well as gathering information about the vehicle’s history, it may give you greater peace of mind about the car you’ve chosen.
Arming yourself with this information before any money changes hands helps you to make a more informed decision and should reduce the chance of a costly surprise later on.
Frequently Asked Questions (FAQs)
What is a PPSR check?
The Personal Property Securities Register holds information about what security interests have been registered on a range of personal property assets. You can use this to check whether a car you’re thinking about buying still has money owing on it, or is held as a security interest by any lender.
How much does a PPSR check cost in New Zealand?
$2 plus GST, so $2.30.
Does a PPSR check show if a car has finance owing?
Yes, it does. This is important because if the previous owner defaults on the loan, the lender may be able to repossess your car, even if you’ve paid for it in full.
Can I buy a car with a registered security interest?
You can, but it’s not a good idea. You should ask the seller to have the interest cleared before you purchase.
Does a PPSR check show accident history?
No, you’ll need to get this information separately.
Should I get a PPSR check when buying from a dealership?
You can, but dealers are required to tell you if there is money owing on a vehicle. If there is, and you’re not told, the lender cannot repossess the car even if the prior owner stops paying.
What information do I need to complete a PPSR search?
It helps to have the vehicle identification number (VIN), chassis number and registration plate.
Ready to take the next step?
Get in touch with the team at better finance™ today. We’re lending experts, and we’re here to help.
Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current developments or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.
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