Ontario buyer who purchased car with lien has it repossessed

A Windsor, Ont. man said a car he bought in a private sale was repossessed from his driveway because the man he bought it from didn’t pay his car loan.

“I don’t have the car. I don’t have the money. Everything is gone,” Mohammed Salman said.

When you borrow money to buy a car the bank will usually place a lien on the vehicle, which will stay in place until it's paid for.

But if you buy a used car from someone and there is a lien on it, you're responsible for the debt and could have to pay it or you could lose the car.

Salman said he found a used Mercedes Benz on Kijiji and came to Toronto to buy the car in a private sale in December of 2019.

Just as the deal was closing Salman said the seller mentioned there was a lien on the car, but promised he would pay it back in about a month.

“At the beginning he never told me there was a lien on the car," Salman said.

Salman said he was concerned and had the man sign a contract that said he would pay back the loan on the car, but he never did.

Salman said he gave the seller $16,500 for the car and then later he spent another $4,000 in repairs.

It was about one year later that Salman got a letter from a bank stating there was a lien on the car and that he would have to pay the loan back or he would lose the car.

“We received a notice from the bank saying you just have one week, if you don't return the car in a week we will file a case against you."

Even though Salman told the bank it wasn't him that owed the money, the car was still repossessed from his driveway.

John Carmichael, CEO of the Ontario Motor Vehicle Industry Council (OMVIC) said, “when buying a car privately, you've got to be certain that the lien is paid off and removed at the time of purchase or before and you want proof."

OMVIC said when it comes to liens on vehicles, consumer protection laws don’t apply to private vehicle transactions, which is why consumers must do their own due diligence before turning over money.

Buyers are also advised to get a Used Vehicle Information Package (UVIP) or Carfax which will provide lien information.

Car dealers registered dealers with OMVIC cannot legally sell a car with a lien on it. When it comes to private sales, if a car is purchased with a lien the new owner can be held responsible for it and there can be more than one lien on a vehicle.

“The buyer has to ensure when they buy a used vehicle that it is free of all liens and encumbrances. It's just the way you have to do business today” said Carmichael.

While Salman could go after the seller to try and get his money back, he said now the man is nowhere to be found.

If you buy a car from an OMVIC registered dealer that has a lien on it, you would be eligible to get your money back from OMVIC’s compensation fund.