How to Check if a Car Has Finance Owing in Australia (2026 Guide)
Buying a car with undisclosed finance is one of the most expensive mistakes Australian car buyers make. You could lose your car and your money — here's how to protect yourself.
⚠️ The Finance Risk is Real
In Australia, if a vehicle has a security interest (finance) registered against it, the lender can repossess the vehicle from you — even if you paid the full purchase price to the seller in good faith. The PPSR is the only way to check this before you buy.
What is “Finance Owing” on a Car?
When someone finances a car — through a bank, credit union, or car dealership — the lender registers a security interest on the PPSR. This gives them legal rights over the vehicle until the loan is fully repaid.
If the seller still owes money on the car when they sell it to you, that security interest remains on the PPSR. You've now bought a car that the bank has a legal claim over. This is called buying an encumbered vehicle.
5 Warning Signs a Car May Have Finance Owing
Price seems too good to be true
Sellers with undisclosed finance often need to sell quickly. Suspiciously low prices are a red flag.
Seller is very eager or rushed
Pressure to complete the sale quickly may indicate the seller is trying to outpace a repo notice.
Cannot provide service history
A seller who owns the car legitimately usually has paperwork. Missing documents are suspicious.
VIN doesn't match registration papers
Mismatched VIN numbers can indicate the car has been rebirthed (using documents from a legitimate car to disguise a stolen one).
Reluctant to let you inspect independently
A legitimate seller welcomes independent inspections. Resistance is a warning sign.
How to Check Finance Owing: Step-by-Step
Get the Vehicle's VIN or Rego Plate
The 17-character VIN is on the dashboard (visible through the windscreen), the driver's door frame, or on the compliance plate under the bonnet. Alternatively, note the registration plate and state.
Run a PPSR Check
Visit CheckMyCars and enter the VIN or rego plate. Select the 5.99 PPSR report option. The check queries the official government database in real time.
Review the Encumbrance Status
Your report will clearly show "Encumbrance Found" or "No Encumbrance" for the vehicle. If finance is found, the report details the type of security interest.
Act on the Results
If there's no finance — great, proceed with confidence. If finance is found, do NOT pay the seller until you have written confirmation from the lender that the debt has been fully discharged.
What Happens if Finance is Found?
If a PPSR check reveals finance owing, you have a few options:
Option 1: Ask the seller to pay off the loan first
Request a discharge of security interest letter from the lender, then run another PPSR check to confirm the encumbrance has been removed.
Option 2: Negotiate a reduced price
If the finance amount is known, you could agree to pay the lender directly as part of settlement, reducing what you pay the seller accordingly.
Option 3: Walk away
If the seller is uncooperative or unable to provide proof of discharge, the safest option is to walk away.
Frequently Asked Questions
Can a bank repossess a car I legally bought?
Yes. Under Australian law, if a security interest is registered on the PPSR, the lender retains rights to the vehicle even if you purchased it without knowledge of the finance.
Is a verbal assurance from the seller enough?
No. Verbal assurances have no legal weight. Only a discharge of security interest confirmed by a fresh PPSR check provides legal protection.
What if the seller says they just paid it off?
Ask for documentation. Lenders typically take 2-4 weeks to remove a security interest after repayment. Don't finalise the purchase until you can run a clear PPSR check.
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