There are important legal and insurance issues that relate to the purchase of low-cost motor vehicles?
It is often the case that people do not consider the legal ramifications of insurance and title relating to low cost motor vehicles. The issue of low cost motor vehicles is particularly relevant to people on low incomes and young people buying their first car.
In many situations the purchase of a low cost motor vehicle is done by private sale and often online contact is made initially. In these situations, it is essential to undertake an online search with the Personal Properties Security Register (PPSR) and this should be done by referring to the VIN number of the motor vehicle. The purpose of the PPSR search is to ascertain whether or not there is money owing on the motor vehicle. If there is, and you purchase the motor vehicle without doing a search it is possible and indeed probable that the company that is owed money will repossess the motor vehicle. If the motor vehicle is not registered with the PPSR, you can then be satisfied that you are buying a motor vehicle without a charge on it and if for some reason there is money owing to a financial institution, they can not pursue you for the debt. The cost of such a PPSR search is $16.30.
You must remember that the registration certificate is not a proof of title. You should also make sure that you get a copy of the drivers’ license of the person selling the motor vehicle for identification purposes and you may have to do likewise.
When purchasing a low cost motor vehicle, or any motor vehicle for that matter, you need to look at the issue of insurance before driving the vehicle.
Firstly, if the vehicle is registered in NSW there will be a compulsory third party personal injury policy attached to the vehicle, also known as a green slip.
Secondly, you should take out your own property damage insurance. If you do not take out comprehensive insurance, which includes insurance of your motor vehicle, then at the very least you should to take out “third party property damage insurance” which insures you against a claim by another person against you for damage to another motor vehicle or other damage.
Also, when taking insurance out on your motor vehicle you should see whether you can take out an insurance policy for what is referred to as “an agreed value” insurance which means you are paid out the agreed value in the event the vehicle is damaged beyond repair rather than the market value of your vehicle which may be much lower than the insured amount noted on your policy.
These issues relating to purchasing low cost motor vehicles are particularly relevant to young people and yes, your children could be the victim of an oversight relating to the matters of insurance and title.
If you would like Jack to address a particular legal issue, send your request to jack.blaxland@ticliblaxland.com.au
This article is intended to be for information and educational purposes only and cannot be relied upon as legal advice. The information may not apply to your circumstances or to your particular situation. If you need specific advice or you have any questions, we welcome you to contact us directly.
