Motor vehicle searching and buyer protections
Search by the prescribed order for motor vehicle serial numbers
When searching the PPSR by a motor vehicle serial number, make sure you enter the correct serial number. For example, if a motor vehicle has both a vehicle identification number (VIN) and a chassis number, you should search using the VIN. The PPSR provides guidance to help you enter the correct serial number.
A serial number search might not reveal all security interests
It is not compulsory for commercial security interests in serial numbered goods to be registered by serial number. The registration may be made against the grantor only. For example, a security interest in a commercial motor vehicle may be registered by reference to the grantor and contain no reference to its serial number, and therefore will only be revealed through a search by grantor.
Motor vehicle buyer protections
If the collateral is a motor vehicle, section 45 of the PPS Act provides that a buyer or lessee will generally take the motor vehicle free of any security interest if:
- at any time between the time the motor vehicle was sold or leased and the start of the previous day a search of the PPSR by reference only to the serial number would not have disclosed a registration which perfected the interest; and
- the seller or lessor is either the person who granted the security interest, or another person who is in possession of the vehicle (provided the person who granted the security interest has lost the right to possess the motor vehicle or is stopped from asserting an interest in the vehicle).
Exceptions to motor vehicle buyer protections
The above protection does not apply if:
- the secured party is in possession of the motor vehicle immediately before the time of the sale or lease; or
- the motor vehicle is bought at a sale held by or on behalf of an execution creditor; or
- the buyer or lessee holds the motor vehicle as inventory; or on behalf of a person who would hold the motor vehicle as inventory; or
- the buyer or lessee buys or leases the motor vehicle with actual or constructive knowledge of the security interest.
Exceptions for motor vehicle licensed dealers
Section 45(3) of the PPS Act provides that a buyer or lessee will generally take the motor vehicle free of any security interests if they provide new value for the motor vehicle and the seller or lessor holds a licence (issued by the state or territory where the sale or lease happens) to deal in that kind of motor vehicle.