Car Cons

Reporter: Tineka Everaardt

Drive away - no more to pay... or is there?

Nicole Kirby's been kicked to the curb - much like thousands of other Aussies fleeced by a financial loophole... That sees them losing their car and their cash...

"Now I've gotta either be on public transport or rely on other people getting me to where i gotta go - it's not easy with 2 kids and a pram." Said Nicole

The Victorian mum bought this Holden Sedan three months ago for $3,000 from a private seller... everything ran smoothly until she got a knock on the door last week...

"It was the repossession guy saying he needed to speak to me about the car and i was in shock." Said Nicole

Turns out the car had a loan of $4,800 attached to it.. When she'd transferred the car into her name - the debt came with it...

"Disappointed in human beings really - that they can do it to other people." Said Nicole

Nicole had thought she'd done all the right checks..

"You asked him all the right questions didn't you?" Said Reporter

"Yeah i asked him is it on finance or a repairable right-off and he said no, no." Said Nicole

Slater and Gordon lawyer Roger Batrouney.. says "buyer beware you always have to be careful what you're buying and who you're buying from."

Car owner A

Loan $10,000

Car owner B

Loan $10,000

This is how it works - car owner A buys a car on finance for $10,000 - then sells the car to owner B - the registration is transferred over... Car owner A stops the repayments on the loan.... and the bank comes chasing Car Owner B...

"If for example the loan installments are not being made and they will realise their security by repossessing the vehicle." Said Roger

He claims there's no law to protect the purchaser...But there are ways to avoid this trap...

Lets get mechanical - when you're buying a private car - you really need to get the vehicle identification number - or VIN - which should be located on the rego sticker... or in most cars under the hood right here..

Then head to the Personal Property Securities Register website.. For $4 you can check if there's any debt or finance outstanding...

Because you don't want end up like Rob Fletcher ... This real estate agent knows the ins and outs of sales contracts - but even he was beaten at his own game when it came to purchasing this $83,000 luxury car..

"If we at fletchers sold your home, you'd purchased it, settled and moved in and suddenly found out the previous owner had put a mortgage on your property - it's really the same scenario." Said Rob

"Did you do all the proper checks and balances before buying it?" Said Reporter

"In recent times there's been a new search criteria that's come in that wasn't in at that time - so no i took the owners word that point that they had title to it and they transferred it in good faith." Said Roger

Unfortunately the register wasn't around when Rob bought the car four years ago... He says the previous owner had $120,000's owing on the car ... which had been used as collateral to get a bank loan... And so his beloved porsche was repossessed...

"I think vic roads should have something on their system that brings up cars that are under finance so they can't be freely transferred between people." Said Nicole

Nicole didn't check the register herself - she relied on a document the previous owner showed her saying the title was clear... and come tomorrow - the banks will repossess this vehicle...

"Do your VIN checks privately yourself - don't go on anyone's word." Said Nicole

Tips when buying a car:

1. Get the vehicle identification number (VIN), located on the rego sticker or in most cars under the hood.

2. Head to the Personal Property Securities Register website, and for $4 you can check if there's any debt or outstanding finance on the car.

Contact:

Personal Property Securities Register - www.ppsr.gov.au