The Personal Property Security Register (PPSR) is a powerful tool that both individuals and businesses can use to protect their interests when buying:
- Motor Vehicles
- Equipment
- Goods
- Business Assets
- Used Equipment/Goods
- Intellectual Property
What is the Personal Property Securities Register?
The Personal Property Securities Register is a Federal Government online platform that was launched in 2012. (Previously each State had its own version of the Register).
Its purpose is to let people know if someone (typically a Bank or Finance company) has a security interest recorded against a specific asset.
For example, when a Lender provides finance for a motor vehicle or piece of equipment, they will typically register a security interest over the asset to protect their position. When the loan is repaid, the interest is removed.
Other Important Information Provided by the PPSR
In addition to indicating if someone has an interest in a particular asset, the Personal Property Securities Register provides additional information such as:
- If the asset is an insurance write-off
- If it has been reported as stolen
- Registration information
- Year of manufacture
- The date first sold
For motor vehicles it also can provide:
- A VIN check
- Odometer verification
- Vehicle valuation
- Price and odometer comparison
- Takata airbag recall data
Why it is critical to perform a Personal Properties Securities Register check
Before purchasing any of the assets outlined above, it is critical to first complete a PPSR check.
The reason for this is that, if the asset has a security charge over it and the borrower defaults, then the Lender has the right to reclaim the asset – any money you paid to the vendor will almost certainly be lost!
Less scrupulous vendors simply take your money and disappear. Even if you can find them, the chances of recovering what you have paid are likely to be remote.
Similarly with insurance write-offs. The asset may appear to be perfect but then you find it is uninsurable or has a limited useful life.
What does a PPSR Report Cost?
A PPSR report can be obtained for as little as $2. This report will indicate whether or not anyone has a security interest in the asset you are looking to purchase.
A more comprehensive (and useful) report will cost between $25.00 and $36.95
A sample report is available for download here.
Protecting your interest using PPSR
Whilst the Personal Property Security Register can be used to check if an asset has a security interest over it, or is a write-off, it can also be used to secure a debt or loan.
For example, if a business sold a piece of equipment to another party on terms, they could lodge a security interest over the equipment, that would protect their position until the loan was repaid.
If the borrower defaulted on the agreement, then the asset could be recovered.
Additionally, should the “borrower” try to sell the asset before the loan was repaid, potential buyers that used the PPSR, would see it had a security interest recorded.
Recording your security interest can also help you rank ahead of unsecured creditors in the event of insolvency.
Summary
The Personal Property Securities Register is a tool that can be used by both individuals and businesses to avoid financial loss.
Over the years, I have seen cases where people have handed over money in good faith only to lose it all, when a Lender later exercised their right to reclaim the asset when the borrower defaulted.
A quick check using the low-cost PPSR database would have prevented this from happening.
If you would like to learn more, or are looking for finance for equipment or motor vehicle, don’t hesitate to give me a call.
