Getting duped happens to the best of us—the caller we think is a relative, or the link we click on believing it’s legit leads us down the rabbit hole of bad decisions. Often, we’re lucky and recognize our error before it becomes too late. Sometimes, though, we’re not and lose thousands of dollars. Out of embarrassment, we try to keep our error a secret. So, when someone like Stacey Attey of Montreal goes public with their story about the nightmare of purchasing a used car with a lien on it, it pays to listen.
What Is a Lien?
A lien is a claim that a lender places on a vehicle for lending money to the vehicle’s owner. This is normal and perfectly legal. For example, when you take out a car loan from the bank to buy a car, the bank will place a lien on the car as security. If you don’t pay back the money you’ve borrowed, the bank can legally repossess the car.
When Do You See Liens on Vehicles?
Car dealers registered with the Ontario Motor Vehicle Industry Council (OMVIC) can only sell lien-free cars. (All dealers in Ontario must be registered with OMVIC—it is illegal to sell cars as an un-registered business.)
If you prefer to purchase privately, you must research the vehicle’s history to protect yourself, because it is not uncommon to find a lien still registered on a privately sold vehicle.
Ask for a Used Vehicle Information Package
When you buy a used car from a private seller in Ontario, they are required by law to provide you with a UVIP, a Used Vehicle Information Package. The complete UVIP includes a vehicle history report and information about any liens on the vehicle.
If the seller doesn’t provide you with a complete UVIP, leave immediately. You’ve likely met a curbsider, i.e., someone who is illegally selling cars for profit.
But That Price Is Too Good…
Many people need a car to get through their daily life. If that daily life includes a low-paying job, then a low-cost car is enticing. That’s exactly what happened to Attey.
Attey was a single a mom and needed an SUV. A private seller who listed the vehicle on Kijiji sold her a 2013 Nissan Rogue in great condition with low mileage for $13,500. (A new model today costs roughly twice that much.) She even had her mechanic inspect it. All looked well, so she paid for it.
Unfortunately, 13 months later, the bank came calling: there was a lien on the vehicle and they wanted to repossess it.
Cars Sold Through a Dealership Must Be Lien-Free
It’s the law across Canada: dealerships are not allowed to sell customers vehicles that still have liens on them. That means that every vehicle listed for sale on our website is lien-free. In addition, buying through a dealer gives you recourse and potential access to a compensation fund should you have found a bad apple. You can’t access that fund if you buy privately.
If you choose to buy privately, do your homework and ensure the seller fulfills their responsibilities, too. Don’t be stuck with someone else’s debt.