How To Secure Your Security Interests On A Car?


It is not uncommon for financial institutions to lend money for the purchase of a car. Some people may purchase their car adding the loan amount to their mortgage. Others go for a separate loan for the car, keeping it as the collateral. If you are a lender and you have given a loan keeping the car as a collateral, then there is a facility for you to register your security interest on the vehicle. You can register this on the PPSR.

PPSR stands for Personal Property Security Register. The first thing to understand is that the PPSR is only a notice board to mention your security interest on the vehicle. It only informs people that there is a person who has given a loan on the car and that it is still unpaid. It is not a title nor is it an official registration of the actual documents. The advantage is that if someone does a PPSR check for the car, he will know that you have a security interest on the car.

You can register the interest on the PPSR only if you have a valid document for the money loaned to the person.

How To Register Your Security Interest?

Before you can register your security interest on the PPSR you should have an account in the PPSR. You can register two types of collaterals in your PPSR – commercial and consumer. We are only concerned with consumer now. This deals with a property, a car, held by a private individual for his use. The registration of collateral on consumer property cannot be more than 7 years.

The next step is to create the secured party group. This is where the details of one who is holding the security interest are given. It could be an organization or an individual. This is where you should enter your details if you are the one who has given a loan on the car.

You should then go on to register the collateral class. It refers to the type of item to which you are lending your money. There are four types of collateral – tangible property, general property, intangible property and financial property. We are only concerned with the tangible property as motor vehicles fall under this category. So, for a loan given against a car, the type will be tangible property.

You should then go and provide the grantor details. This will mean that you should provide the details of the person who owns the car in which you are lending money. You should give all details of the person including the passport number, driving license number etc. You should ensure that the details are updated ones.

Care must be taken to give the correct collateral details and the grantor details. Once the details are given you can review your application. If you are sure all the details are correct, then you can make the payment and get the registration confirmed. Once this is done, anybody getting a car history report can see your security interest on the car.

You must necessarily send a copy of the registration to the grantor letting him know you have registered your security interest on the car.

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