July 8, 2011

Top 12 tips in buying a second hand car in the Philippines

All this time, you’ve been aiming to cruise the town or go to and fro your office with your very own wheels but you just can’t have the right amount of money to buy that brand new black sedan seducing you every time you pass the nearby showroom on your way to work.  Most people say it is always better to be the one who gets to put the first miles on a car and buying a second hand car is like buying a huge problem.   For some reason these are true but if you can’t afford a new one then don’t because buying a used one is not as bad - if you know what to consider.  You will have to invest not just money but time, patience and attention to details.  Here are few tips that will guide you in buying the perfect used car for you.   
1.       Documents.  No matter how good that car is, if the papers aren’t clean, you will never be able to drive that car with peace of mind.  Do not waste your time on any car deals that don’t have these papers cleaned up.
Documents you need to check:
1.)    Original copy of Certificate of registration
                Now just because you were able to see it and hold it doesn’t mean it’s clean.  You will still need to read what is written.  Check if the word “ENCUMBERED” is written, normally at the upper right section.  If you can’t see this word, it means the car is clean and you may go proceed with the next steps.  But if you can see this word, you may forget about it and start looking for another.  An “ENCUMBERED” word written on the Certificate of registration, in simple terms, would mean that the vehicle is not yet cleared from its credit with the bank or any financial institutions that paid for the car.  Unless the seller has been downright honest to tell you at the beginning about this and hands you over the details and provides you a noble settlement deal, refuse and turn it down.
2.)    Original Receipt – Current year
3.)    Original LTO Plate number with the latest registration sticker.
If the plate number attached to the front and at the back is not the original sheet metal license plate from LTO, you will have to ask for the AUTHORITY TO USE CUSTOMIZED PLATE officially issued by the Land Transportation Office from the seller.  If he can’t provide any then turn it down.  Using customized license plate is prohibited unless you have the letter mentioned in hand every time you are out driving.  It may not be of a big issue but once you are randomly pulled over by an officer on a check point or apprehended for a traffic violation, they will ask for that piece of paper and you wouldn’t like the hassle it will cause you for not having it.
If the seller can’t show these important documents to you onset, never hesitate to leave the car.

2.       Motor and Body number.  Check the motor and body number engraved on the block and on the chassis firewall if it matches the motor number and body number written on the certificate of registration.  If you can’t find it ask the seller to locate it for you and make sure you will be able to see it for yourself.  A motor number that doesn’t match with what is written on the papers is a big trouble.  Again, never hesitate to leave.

3.       Engine leaks.  Make sure the engine bay is dry in all localities.  A trace of oil in the engine would mean a leakage is present elsewhere and would mean you shelling out another butt load of money ripping off the engine block, replacing all seals and gaskets later on.

4.       Mileage.  The number of kilometers the car travelled determines its freshness.  Take a used car with a low mileage reading.  You can always assume that a car with a relatively high mileage reading has its internal engine parts worn out which will later translate to be a huge liability in the end.

5.       Engine condition.  Do not be deceived by looks.  A beautiful car with a busted engine is useless.  The engine is normally what most un-experienced used car buyers fail to give more attention to.  If you buy a used car with poor engine condition, chances are, you might have to spend again at least half of the amount you spend in buying the whole car just to bring it back to its old glorious performance.  If you want to get the car that will give you the best value for your hard earned money, you will need to spend time on this one.
What you need to check:
                Starting – You will need to check this one in two different conditions. An engine behaves differently in its hot condition as oppose to its cold condition.  Start the engine when it’s hot and start it when it’s cold.  A cold start would mean starting the engine from several hours it has been off.  This would require you to spend hours waiting for the engine to cool down and try starting again.  If the engine starts just fine on a single try, it means engine is still in top condition.  Otherwise, engine has to be checked or cleaned. 
                Idle – Check the condition of the engine at idle.  If the idling is erratic, something is wrong with the engine.  If it idles steadily, this indicates that the engine is in condition.  You can check this by looking at the tachometer in the instrument panel.  Ideally, the engine idle reading should stay between 900 and 1000 rpm.
                Throttle response – You need to check this to see how the engine responds every time you step on the gas pedal.  If the engine revs up without delay when you step on the gas, this means that the engine responds properly as expected.  Otherwise, you can expect an untimely engine revamp few months after.

6.       Clutch & Transmission.  If this thing has not been checked properly, this could be a huge burden for you later on.  Replacing transmission parts are no joke.  They will cost a lot so you should pay sizable attention to this as well.  You can check this by rolling out for a test drive.  Feel the engine as to how the car responds as you shift gears.  Feel the shifter if it shifts from one gear to another without any trouble.  Feel the engine power at first gear as it runs from full stop.  If you feel less power, this indicates that the transmission system already needs serious attention and serious amount of cash.

7.       Wheels & Suspension.  The wheels share the same importance as to the engine.  It plays a huge role in your safety while driving.  Check the tires if it wear unevenly on one side.  If it is, this means that the tires camber alignment is not properly set and should be corrected as soon as possible.  Check the tire thread of each tire as well if it has reached its thread life and is due for replacement.  You can exploit this flaw to your advantage by asking for a price cut.
You can check the suspensions by taking it on a rough and wild ride.  Wiggles, squeaks, noise, metal on metal blares and excessive throb indicate a poor suspension system and will be costly in the long run.  Again do not hesitate to find another prospect.

8.       Brakes.  The braking system, for the most part, is important in a car for your safety, so you should pay full attention in checking this one.  Bend over to check underneath each of the 4 tires if the inside of rims and the hubs are dry.  If you see spots drenched in fluid, its break lines are leaking and needs immediate repair otherwise you will have to refill your brake fluid reservoir once in a while.  Check the brake master cylinder under the hood as well for any signs of leaks.  A leaking brake system is a huge expense later on. Don’t forget to check your e-brake as well if it holds fine.  Try to drive and set the car on an inclined road and pull the hand brake.  If the car sits still then it should be okay.

9.       Air Conditioning System.  Forget a car deal with a busted air conditioning system if you don’t want to burn your pocket for a major air-con repair.  Don’t even put a faith on sellers that will tell you “the air-con is fine, it just needs Freon charge”.  An air-con Freon, if the air-con system is sealed, does not run out or disperse even when not in use.  In fact it could last and stay inside the system for a long period of time as long as the system is locked up.  An air-con system that needs Freon charging has leaks somewhere in its route and it will never be termed as fine.  Otherwise check the air-con system performance of the car by driving it under the heat of the sun preferably at noon time.  If the air-con can’t cool the car enough then the system needs to be checked and would possibly require parts replacement soon.  The best thing is to find yourself another car deal.

10.   Electricals and Accessories.  Don’t treat these as plain car cosmetics because these hold your safety especially at night.  Check all the lights.
Head lights both high beam and low beam
Signal lights both front and rear
Fender lights
Tail lights
Brake lights
Reverse lights
Cabin lights
Trunk lights
Fog lights
Check the wiper.  Most often, this thing is neglected and not given that much importance until it rains so hard and you have to pull over because your wiper is busted and you didn’t know.
Check the windows if you can pull all of them down in case you want to cruise on open air.
Check the door locks if they are all functional.

11.   Thorough test drive.  Drive it and feel it because you will know by plain impulse if that car is for you after you have checked all of the items mentioned above.  Drive it fast and slow.  Examine its performance by driving it out in the freeway.  If you have to, spend a sufficient amount of money to load it with fuel and drive it around to your satisfaction.  Take it to hilly places so you could see its performance climbing inclined courses.  Try how the engine responds on a sudden full stop.  Drive real fast and step on the brake.  If the car is in shape, this should not be a problem.

12.   Lastly, if you already feel comfortable with it and you are all satisfied, it’s time to close the deal.  The seller will provide you with the DEED OF SALE together with all the documents of the unit.  Make sure you read everything stipulated on the document including the vehicles description.  If you have to, ask for an acknowledgement receipt with the seller’s signature when you hand over the cash.  This will prove that you have paid a sum of money as payment for the car.  Also, ask at least a photocopy of the seller’s identification for your reference with a picture and signature.  This will prevent any future hassles on your part.


Though these steps are somewhat tedious, these will save you and set you apart from people who have been hasty in buying used car that have already spent double for unforeseen repairs and replacements on things they failed to check onset. 

291 comments:

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admin_TOL said...

Hi Anonymous,

RSU is not necessary to do ownership transfer but since there is a little discrepancy on the document, LTO seems to necessitate it in your case to fix the discrepancy. There is no problem in transacting with miswritten numbers may it be chassis/motor/model or any inconsistency for that matter-typo errors happen one too many times. As long as you have a back up document as proof then you'll be okay except it will take you more time and extra procedures. Good luck

Unknown said...

hi admin!

me nabili ako motor, kaso hindi maibigay ung or/cr, nalaman ko me problema sa banko ung motor.ano kaya pwede ko gawin?

thanks!
dave

admin_TOL said...

Hi Dave,

Return that motor to the seller and get your money back. Save yourself from the stress and headache. Return it back asap. You, as the buyer, have the right to return it back. The seller should have been downright honest to tell you as to its problem but sounds like he didn't so in that case, you may even press charges for trying to defraud you as a buyer. Good luck.

Anonymous said...

In need of you advice.Purchased a 2nd hand vehicle almost a year now. Scenario are as follows:
Open Deed of sale – not notarized
Certificate of registration marked encumbered but supported w/ photocopy of Acknowledgement receipt & release of chattel mortgage – not notarized.
Am I gonna’ encounter problem in the future when I eventually decided to resell it? Thank you! Really appreciate this helpful site.

admin_TOL said...

Hi Anonymous,

I'd say not a problem but inconvenience. The "Encumbered" marked on the CR may(or may not) give you a little bit of difficulty even with the presence of mortgage release certificate. That will destroy the whole sales pitch later on when you finally decide to sell it specially to scrupulous buyers. Or, It could give your future buyers the comfort of low balling you for the paperwork that goes along. If you're not planning on selling it just yet, I suggest you clean the documents now. Transfer the ownership to your name so that you can secure a new CR and get rid of that "Encumbered" stinger for good. This will make your life easier later on when you sell it. Thank you and Good luck

Anonymous said...

Thanks TOL, follow-up question, can I transact the transfer of ownership in any LTO extension office & clear the encumbered mark?

admin_TOL said...

Any LTO branch near you. You're welcome.
Thanks.

Anonymous said...

I am tracking a truck operated by a man who owes me a lot of money as the losing defendant in a MTCC case. The truck has a 2 year old LTO paper in a shipping companies name. That company claimed it to their insurance carrier after it was involved in a roll over accident. The insurance company sold it to an individual who provided me with a notarized affidavit of sale to the defendant. The Sheriff of the MTCC cant confiscate the vehicle because the defendant produces the expired (in March 2014) OR/CR with the owner still being the shipping company. I have alarmed the vehicle with LTO but I think it takes a month to activate as they told me. My question: how hard for the defendant to register this truck or transfer ownership to a friends name so I can't confiscate it, Both Before and after the alarm takes effect? If he registers it still in the shipping companies name and I inform them, can they file a complaint to nullify the registration that they gave no permission to continue to be put in their name. The man who bought it from the insurance company told me he just turned the deed of sale over to the defendant so he would not need to pay taxes(BIR I think). He fixed the engine and the defendant put the body back together, maybe using another chassis, I don't know, but for some reason he is still driving it around with expired LTO CR/OR, switching plates, side stenciling from another REGISTERED vehicle he owns in his name. Maybe because its a big hassle to register it after having been almost totally destroyed going over a cliff and ending up overturned. I,m American and our laws are very strict on "salvage " vehicles, but I don't know the LTO laws here in the Philippines. Thanks so much for your help.

Unknown said...

(Continued from "I am tracking a truck"). LTO was going to impound the truck after I tracked it and summoned them. It was operating with a home made plate on the rear and the over 2 year old OR/CR. But they had to release it because it was parked when their Law Enforcement officers arrived and not in motion. The LEO chief assured me it would be impounded once the alarm I had put on the truck was activated. The manager of the shipping company originally owning the vehicle was very helpful to me. They seem to be very reputable and I'm sure would not want this truck illegally roaming the streets while still in their name, probably with no liability insurance. When the truck was first apprehended by the MTCC Sheriff, it was displaying a rear plate and side stenciling of a truck indeed owned by the defendant. But they are tricky and called the Police and pointed out that the engine number was different then the one the Sheriff showed on the records he had of that plate number. Of course it was because they were running it with switched plates. So the Sheriff could not impound it. Later they were caught by both the Sheriff again and LTO with plates(one was home made) that matched the expired LTO showing the owner as the shipping company. My thinking is that if he is smart enough, before the alarm takes effect, he could transfer ownership to a friend to escape apprehension by the Sheriff. But after such a bad accident that might be difficult for him. After the alarm is in effect, LTO told me he can do nothing without my permission, I'm not sure I believe that.This was out in the province and to be honest I don't think they know what they are doing. Thanks for any comments, ideas or suggestions you might have.

admin_TOL said...

Hi Anonymous,

Technically he can't register it until he fixes the mess BUT for plenty of ways, he still may, if he wants to run from all the trouble. He can play it dirty and either take the truck to a remote LTO branch from a far away province down south or up north, pay some good amount of cash to someone from the inside, and then rig all the truck documents, register it to new name, and sell it and totally forget about you and move on. If that man has every intention to run away from his debt, he's not gonna go and re-register it under the shipping companies name anymore like what you are assuming. The LTO has strict laws too but sometimes(or most of the time) money talks and those laws are thrown out the window, more than I hate to admit. Switching plates and tampering chassis number are illegal and I can't understand why LTO/Sheriff/police can't do anything about it in the first place and they have to tell you all these bogus excuses. Well, this doesn't surprise me at all but it is such a shame. Are you after the truck as payment for the debt or would you forget about the truck if the man just pay you cash or anything of value? I don't see that truck's story ending soon in your favor, in all honesty, but I may be wrong. Are you working all by yourself on this? If you can find somebody who can tap someone who has influences/connections with authorities, it will make this possible for you to work in your favor. Otherwise they won't move and you're gonna get the same excuses over and over.
I know how hard it is for you to go through this and I'm sorry. Good luck.

Anonymous said...

Thanks for quick reply. Yes, I know how the money issue works and I suspect this man has contacts in the LTO there. I just want my money and a big truck is easy to track, rather then his pick up truck registered in his name. I do have some contacts as well as my lawyer trying to help me, but this guy is quite shady as you can see yourself. I am also surprised none of the 3 law enforcement agencies there do nothing, they don't seem to work together. LTO was about to impound the vehicle last week. Driver refused to produce his license, home made plate on rear of the truck, expired LTO CR/OR, yet the truck was released because, as the team leader of the LTO LEO's told me, it was parked and not in motion. This was after the sister of the deadbeat showed up and called someone she knows at LTO.

admin_TOL said...

Sounds like this man has some tough allies inside and I sense they will try to downplay your case until you give up and just let go of it. All these violations in front of their faces and nothing they can/will do about it. It's classic. Always unashamed to play blind/deaf/dumb for the right price. You said you have alarmed that truck with LTO but said will take a month to activate? That is foolish. Try to confirm that from your lawyer because I bet its just an old plea to downplay you. If you are dead serious about getting your money, you need to play tricks too and have strong allies because the truth is, these 3 agencies don't talk, they won't and they don't care about your case. To them your case is probably irrelevant because you are not from here. No discouragement, just telling you what you're dealing with so you can prepare. Good luck.

Unknown said...

I'm gathering allies. This guy owes everyone. Since he got ejected from my house, after a year in court, I've been getting bills from all the people he owes. He's a professional deadbeat, but I'll get him. My writ of execution is good for 5 years. He is not very smart, if he was, he would have changed ownership of everything he owns in the last year, I'm rather surprised he didn't.

Unknown said...

Minivan for Sale @ 195K Pesos only!
http://www.olx.ph/item/multi-cab-car-ID7dypl.html

Anonymous said...

sir may I ask is it allowed to the car which registration already expired. with a reason of you are going to the emission test so you can register it to the Lto?

admin_TOL said...

Hi Anonymous,

Technically you need to renew registration weeks or days before it even expires. But there are some cases that circumstances keep us from doing this so I suggest that you still go and take the car to any emission test centers near you so that you can renew the registration. It is very unlikely that you will be flagged down unless you commit a traffic violation. Good luck.

Anonymous said...

*is it allowed to drive the car

Anonymous said...

thanks sir

archie said...

Good day, I'm planning yo buy a second hand car by cash.
could you give me some tips on how not to get ripped off?

admin_TOL said...

Hi Unknown,

no. 1 don't get excited
no. 2 follow all the tips I mentioned above. Pay attention on tip 1.
no. 3 don't show too much interest even if you think you've found the right prospect to give you more negotiating power.
no. 4 test drive as many times as possible(pay for the gas)
no. 5 if you're not too knowledgeable, always take a car expert buddy with you.

Good luck.

Anonymous said...

Good day sir

If the car is under company name who is the authorized person
to sign in the DOS?

TIA sir

admin_TOL said...

Hi Anonymous,

Anyone who represents the company, normally HR head or Finance head if not the Company owner. Who ever signs, secure copy of identification showing current connection to the company. Good luck.

kitfox pilot said...

Great Site!
Ok so I'm looking at a 2000 isuzu pick that I had inspected and did a long test drive and everything looks good. Im not sure what or and cr means but the registration numbers check out with the license and vin number. The seller claims he has owned the truck for 2 years and that the truck was purchased from his uncle who the seller claimed worked at san miguel foods in manila. everything looked good until we went to LTO in pampanga where I noticed the truck was still registered to san miguel foods and the notorized bill of sale was only 3 months old! The seller claims his "uncle" has been paying off the truck on payments. The car text information indicates no problems and there is no incumberances that we can see. we are paying 285,000php and on the bill of sale it says the truck sold for $70,000php there appeared in the paperwork that san miguel had sold/auctioned off about 12 other vehicles that same day(about 3 months ago)..
Anyway Ibacked out of the sale because it just seemed a little suspect..thanks for any input you might have on a situation like this....warren

admin_TOL said...

Hi Warren,

You backed out and that was smart. You did the right thing. If you feel it's anomalous then let it go. There are tons out there and you should never get too excited. To me, it sounds like the truck's condition is okay but the grey areas make the whole deal too sour and that is not good. You should wait and check out other prospects than hurry and settle with something shady. Good luck.

Anonymous said...

good evening sir,

im planning to buy a second hand car from the second owner who has the original CR/OR with open deed of sale from the first owner. do i need to tell the second owner (who is now the seller) to accomplish the open deed of sale of the first owner and execute another deed of sale between us. Or is it ok for me to just take the open deed of the first owner (bypassing the second owner) and accomplish the open deed of sale between the first owner and me?

admin_TOL said...

Hi Anonymous,

It's ok to take the open DOS. On record you will be the second owner though technically you are the third. Please double check the open DOS before closing the deal, check the motor/body number and everything else that needs to be checked. Good luck. Thanks.

Unknown said...

Please, can I ask... What is the availability of spare parts for older cars in the Philppines? Can you still get parts for cars over 15 or 20 years old? Are Japanese or Korean cars better? Peter

admin_TOL said...

Hi Peter,

Spare/aftermarket parts of 15-20 year old cars are still available in your local auto supplies, particularly in Manila. Japanese cars are better especially the 90's ones. Good luck

Anonymous said...

The best site to guide people on buying used vehicle.. thanks for the efforts in making others informed!!

Bob

admin_TOL said...

Thank you Bob!

Unknown said...
This comment has been removed by the author.
Unknown said...
This comment has been removed by the author.
Unknown said...

Hello Admin... I'm planning to buy a 2ndhand motorcycle. The vendor is already the 2nd owner. The problem is he only got a photocopied OR/CR from the 1st owner since the original was lost during the typhoon yolanda. What should i do to transfer it to my name if this is the case. The vendor stated also that he renewed the registration just this year and a new plate number will be released by March 2017. In addition, among the photos that he posted, I've noticed the word "ENCUMBERED" on the CR and he didn't mention anything about it. Now I'm a little bit confused. Please Help.

admin_TOL said...

Hi Cyber God,

I strongly recommend to forget about that motorcycle and go find another one. Obviously the seller has not been downright honest to disclose every detail, particularly the encumbrance. The seller must probably on the assumption that you as the buyer will not notice or not knowledgeable about encumbrances. Please drop the deal immediately, I'm certain you will find a better/cleaner motorcycle out there. Don't get too excited with that one so you can save yourself from future headaches. Good luck.

Anonymous said...

Hi,

im planning on buying a second harnd car. can i have the OR/CR checked out at any LTO branch or does it have to be where vehicle is registered?

admin_TOL said...

Hi Anonymous,

You can have it checked at any LTO branch. They will just look it up in their computer and they can give you the details of the registration. Good luck.

Anonymous said...

Hi, I'm planning to buy a 2nd hand car, but the owner indicated in the or/cr of the vehicle was already dead. They don't have deed of sale signed by the person appeared on th registration. Who will sign the dees of sale? Or what documents are needed so that the children of the deceased owner can sell the vehicle to me. Thank you!

admin_TOL said...

Hi Anonymous,

Actually the burden of securing all necessary documents should be on the seller, and not on you. There will be paperwork needed and they will spend some extra cash for necessary legal documents. I haven't really had experience on this particular type of trade but based on what I know, they will have to secure Special power of attorney and Affidavits signed by the immediate family. They need to consult a lawyer regarding transfer of property and LTO as for the specific documents they will need but frankly, for you, it is much more convenient to just drop this deal and go find another prospect.

Good luck

Anonymous said...

hi admin. what legal documents do i need to request from the seller if the vehicle that i'm planning to buy is "encumbered"?

admin_TOL said...

Hi Anonymous,

The seller has to provide you with bank or financial certificates stating that the car is fully paid and cleared from encumbrance. He also has to go to the registry of deeds to file those documents and he has to request new copies of CR to remove the "ENCUMBERED" annotation. It is a tedious/stressful process so I strongly recommend to just go find another deal and save yourself from the hassle. There are plenty of cars out there and don't settle with something that will make your life difficult. Good luck.

Anonymous said...

hi admin,

I planned to buy a 2nd hand Car my question is HOW DO I KNOW THAT THE ODO METER OF SAID VEHICLE IS NOT TAMPERED.

Thank you and appreciate your feedback.

admin_TOL said...

Hi Anonymous,

I'd say spotting if the odo is tampered is as difficult as tamping the odo itself. For a common car buyer and seller, it will be very difficult to mess around with the instrument panel though I have heard there are experts that can. Low mileage is one thing but car condition is another. What I will suggest is to not put it all on what the odo says but also on the car's condition by checking all the items that I have pointed in this article. Sellers could tamper odo readings but they can't mask the car's condition if it is bad and this is what you can detect as a buyer. Mostly it's not always how low the odo reading is but how well the car was taken cared of by the owner. I would personally choose an older high mileage car driven by a careful, responsible human over a younger low mileage car driven by a reckless, mad gorilla. So as I always say in previous comments, be smart, don't get too excited, and be vigilant so you can get that perfect 2nd hand car for you. Hope this helps you. Good luck.

Unknown said...

Hi admin,

Ask lng po ako.. My nabinili akong MC may deed of sale nmn sya nka notarized nmn ng Atty. Pero wlang sign ng mga witnesses at d ko nkuha ang 2 valid gov id na photocopy na my kasamang 3 signs ...Ang tanong ko po admin pag my LTO checkpoint or police checkpoint dapat ko po ipakita or kailangan ba nila mikta ang 2 photocopy ID ng seller na my with 3signiture kasama na ang DOS?.... Tnx po

admin_TOL said...

Hi Gamay,

No need to show the IDs of the seller. Normally they will just ask for your license and OR/CR. But just always keep a copy of the D.O.S. in your u-box because you'll never know when you are going to need it. Good luck.

Anonymous said...

Kumuha kami ng hipag ko ng sasakyan. Ang arrangement is:
1. I will act as a co-maker
2. I will lend her half of the price of the DP kasi kulang pa ang pera nya
3. She will pay for the monthly dues basta sa kanya nkagarahe ang sasakyan.

Now, this is the issue:
1. Yung sasakyan, I was the one named after it. It was per advise daw ng sis in law ko sa Hyundai sales reps na sa akin na ipangalan since di cya pumasa sa CI
2. Now, she wants me to give her a "deed of sale" kasi sa kanya naman daw talaga yun, dahil kaniya naman ang idea to purchase the vehicle
3. She won't and didn't pay the previous two months unless I give to her the "deed of sale" in which I told her that what I can give to her is "Deed of assumption of mortgage" with attachment of deed of sale upon completion of payments. She doesn't want the latter and insisted that it should be deed of sale only despite that it was mortgaged in bank wherein I was named as borrower.

Can you please suggest to me a better opinion and suggestions.

Thanks!

Confused sis in law

admin_TOL said...

Hi "Confused sis in law"

My comments:

1. In all legality, the car is yours because the document says it's yours regardless who pays the mortgage. You are the liable and accountable assumed owner. I don't feel your sis in law should ever treat that as an issue since the car is in her possession, probably all of the time, and you are family anyway.

2. You can NOT give her a deed of sale, even if both of you want to, because that car is NOT YET owned by either one of you because it is still not free from encumbrance. Technically the bank who financed it is still the owner and basically you can not sell something that is not yours so no way you can issue a legit and legal deed of sale to anybody. If you attempt to, by any means, I assure you, you'll get yourself into trouble for trying to sell an encumbered vehicle.

3. You are right. Deed of assumption of mortgage is the correct document she needs to take from you because she still has to pay the monthly mortgage. Either that or none at all. If she wants a deed of sale, ask her to pay the car's balance so that bank will release the car from encumbrance and will give you legal ownership of the car. That's the time you can issue a legal deed of sale.

4. Really none of my business but it sounds like your sis in law has some attitude problem. First, in her ambitious desire to own a car, she asked your help, used your money, your clean credit record because hers is dirty and then suddenly she yanks herself from all the relief and starts insisting for some deed of sale like she's a somebody. She even tried to put you into trouble by missing to pay the first months of her obligations. Mean opportunist

I suggest do not give in to her demands, and if she keeps on playing hard on you, get yourself a lawyer asap because it's gonna get ugly for you if she continues to miss payments. The best thing for you to do, if it does not go well with her, is you take the car and take the accountability of the mortgage. Return whatever amount she shared or spent to get her hands off the car.

Protect yourself. Your credit reputation and credibility are at stake so be smart and fierce. It is sad that things like this happen between families but yeah, it happens. Good luck.

Anonymous said...

Greetings,

May I know why it is an issue for the buyer of a secondhand car when the unit has an engine that is not yet indicated in the cr? Also, What are the processes I need to do for me to address this problem?

admin_TOL said...

Hi Anonymous,

Essentially you'll have trouble renewing the registration, transferring ownership, and sell it later on. When you do these transactions your chassis/engine stencil should match with what is written on the CR, otherwise that is trouble. When you say engine number not indicated in the CR, I assume what you mean is that the car had an engine transplant and the CR was not updated. If this is the case, you should have with you these documents below, and you must take them to LTO for change engine registration.

Original Certificate of Registration
Original Official Receipt of Payment of latest MVUC and other fees
Photocopy of the CR and OR (source of the chassis/engine)
Confirmation of CR/OR when the registering district Office is different from the district office that issued the CR/OR (source of the chassis/engine)
Affidavit of change chassis/engine
PNP-TMG MV Clearance Certificate
Deed of Sale of chassis/engine if acquired from different persons or entities
Appropriate Insurance Certificate of Cover
Duly accomplished and approved Motor Vehicle Inspection Report (MVIR)
Taxpayer’s Identification Number (TIN)

You have to pay for service fees of course which I'd think is not that much if you are going to transact it on your own. Process is simple if you have all the docs with you.

Good luck.

Adiksagala said...
This comment has been removed by the author.
Adiksagala said...

Hi sir, I am planning to buy a used car. The plate number says it was registered in region 6, would it post a problem if I used it in MM? How do I check if it is not a hot car? Thnxvm

admin_TOL said...

Hi Adiksagala,

No problems. You can use the car anywhere in the PH. You can check it at any LTO branch or you can try their SMS verification service.


1. Type LTO VEHICLE PLATE NUMBER

2. Then send to 2600.

e.g. LTO VEHICLE ABC112

This service costs PHP 2.50/text

Good luck

Anonymous said...

Hi..mag tanong lang po..meron ako friend na nag alok sakin...meron sya bank approval sa bank na car loan...then ako nalang daw mag take ng kanyang bank approval..it means na ako na lahat ang gagastos para ma ilabas sa distributor ang car, like downpayment...at siyempre lahat ng papers sa kanya naka pangalan...ano po ang panghahawakan kong papers kung sakali..mailabas nya yung car at ako na ang hahawak..thanks in advance sa answer pls..

Unknown said...

Goodmorning sir, I would just like to ask if it is safe to buy this car that we are checking out. The CR has the word encumbered BUT the seller has all the supporting papers from the bank and the ROD that they are cleared from debt. The CR is also from the NCR region and we are from CEBU. What can you suggest to us sir? Is it safe to buy this car? All documents and papers are provided by the seller already.

admin_TOL said...

Hi Anonymous,

That's a kind of deal that could turn sour anytime later on and it could get ugly for you. I recommend you turn it down. Instead, just apply a bank loan for yourself so the papers and the accountability will be under your name. This is for your own protection and good, trust me. It's not a pair of shoes you are buying but a car worth a fortune so you must be smart in dealing with it. Good luck.

admin_TOL said...

Hi Khalil,

Safe? Yes, as long as the documents are complete and authentic. But it's not just a question of safety, but also time to process those documents. It will require valuable time and money to go and process these papers and if you are willing to do that then go ahead. But if not, I suggest to just drop the deal and go find another prospect, I am certain that there are a lot more out there, just be patient. Always go for the good buy, something that you will just enjoy driving right away after closing the deal. No more paperwork, no repairs, or any inconvenience. I suggest go for that deal. And I am sure you can easily find one of that kind. Sometimes we get too excited and we decide too quick. And that's how we get to trouble. So just relax, and think it over, and go search for other prospects.

The region won't matter, you can use it anywhere nationwide.

Good luck.

Unknown said...

Sir another question is that, if it is possible to change the CR under my name and the OR is not yet due for renewal which is under the first owners name.

Unknown said...

May I also ask what the requirements for the CR transferring of name are?

Unknown said...

Sir the OR / CR of the unit i'm planning to buy is from NCR & the CR is still encumbered.The OR will expire on Aug. 2017. Seller has the ROD docs. notarized what will i process first? Is it the confirmation of CR & OR from LTO (i'm from region 7), the PNP clearance & Macro etching certificate , cancellation of mortgage bec. CR is still encumbered or the Transfer of Ownership of Private MVs. I'm confused which one is the first step.

What can you advise sir. Is it possible to process the CR first to cancel the encumbered with my name on it but the OR I will renew it by Aug. 2017 yet bec. it is not yet due and the name will be still under the 1st owner.

or is it safe to wait until the OR will due by Aug. 2017 then process everything from cancellation of mortgage until the transfer of ownership. Am I not going to have a penalties of this long time cancellation and transferring of ownership?

admin_TOL said...

Hi Khalil,

I suggest to just wait and then do all your transactions at 1 time. Yes it is Safe to just wait and you are not going to be penalized so don't worry.

Check out www.lto.gov.ph for the list of requirements and for the fees that you have to pay. I suggest to just spend time completing the requirements now, since there are a lot, while waiting for the registration renewal due date.

You can drive the car even if the registration is not yet under your name so don't worry. Just make sure that you have a copy of the docs particularly the Deed of Sale when you take the car out.

Good luck.

mr.aries said...

hello sir.
i bought a second hand mc from casa. with encumbered details on its cr. last 2012. and i had its or. and we made a deed of sale but i forgot to get the first owners xerox i.d. I want to sell that mc now. all i have was its OR , CR and my deed of sale. is it ok to sell my motorcycle now? since I bought it i didnt hv any problem with that encumbered written on its or cr.

mr.aries said...

hello sir;
pahingi po ng advice regarding s motorcycle n binili ko last 2012. may deed of sale po ako pero wala ako copy i.d ng first owner. nabili ko po s casa at yung or cr nya may nksulat na encumbered. simula nung nabili ko wala naman pong naging problem. ngayon lang po na gusto ko na sya ibenta. yun lang po hawak ko papers or cr and deed of sale.ano po ba maganda gawin?
thanks po.

mr.aries said...

hello sir;
pahingi po ng advice regarding s motorcycle n binili ko last 2012. may deed of sale po ako pero wala ako copy i.d ng first owner. nabili ko po s casa at yung or cr nya may nksulat na encumbered. simula nung nabili ko wala naman pong naging problem. ngayon lang po na gusto ko na sya ibenta. yun lang po hawak ko papers or cr and deed of sale.ano po ba maganda gawin?
thanks po.

admin_TOL said...

Hi Mr.Aries,

Without loan clearance docs as proof that the mc is cleared from encumbrance, it would be very difficult to sell. When you bought that from casa you should have asked those docs. I would believe that the mc is already paid(probably by the casa), it could just be that the CR was not processed to remove the ENCUMBERED annotation and then they sold it to you. Try to contact the casa who sold it to you and get information as to which bank/financial institution the mc was financed. Then secure loan clearance from them. It will be a tedious process but you have to do it if you want to sell it for a fair price. Unless if you found a buyer who is completely unaware of encumbered annotation issue, there are very very few people who will put a penny to it. So it's either go through the hassle(spend time and money) to secure the loan clearance docs to sell it for a fair price or just keep the motorcycle or sell it real cheap, or press your luck selling it as it is and hope someone will buy the mc along with its docs issue. Good luck.

Anonymous said...

Hello Admin Idol! I would to ask an advise. Meron akong bibilhin na Car but sabi sa akin ng seller may Encumbered daw na nakalagay sa paper pero he has supporting docs daw po. Mahirap at magastos po ba ayusin yung papers pag ganun? Thanks in advance! - Ferdz

admin_TOL said...

Hi Ferdz,

Yes. It will take you time and money to clean those papers up. Unless you are willing to go through the hassle, I suggest you forget about that deal and go look for another one. Don't rush it my friend, Relax. More than you know, there are plenty of better options out there, just be patient and be smart. Take time and don't get too excited. Good luck!

Unknown said...
This comment has been removed by the author.
Anonymous said...

Thanks po sa reply. Pano po kaya step by step process na malnis yung papers Kung sakali po i-pursue ko yung pagbili.. And how much po kaya magagastos ko? Thank you so much po sa tulong!
-Ferdz

admin_TOL said...

Hi Ferdz,

First you have to go to the bank that issued the loan to verify the authenticity of the clearance documents. Then you have to go to the Registry of deeds and transact for a Release of Mortgage certificate. I am not sure as to the price but definitely it won't hurt. Then you have to go to LTO and transact for a CR reprint to remove the encumbrance annotation. You can also get it transferred to your name as well so you will do everything at 1 time. It will probably cost you, 2K, more or less but I suggest you check out www.lto.gov.ph for the requirements and exact fees of your transactions. You might probably have to spend 2 days off from work to transact all of these.

It's a lot of work but if you are up to it, then go. Just make sure that the bank documents are authentic before you even close the deal. Scammers are everywhere and they will take advantage of people's ignorance so make sure you spend time thinking about this deal.. or at least try to still reconsider looking for another buy.. a buy that will no longer require you to do all these paperwork.

Think about it. Good luck.

Anonymous said...

Need Advice po Admin,
Balak po kasi namin bumili ng bank repo car. BANK agent daw po yung katransact namin. Sa kanya daw na award (through bidding) ung car then lilipat lang daw sa name namin ung docs. Gusto lang po sana namin makasiguro na di po kami maloloko. Di nya raw po kasi mabibigay yung Original OR CR since na transfer p daw sa name nya then sa amin which will take 2-3 weeks daw. Photo copies lang daw ng ORCR, notarized deed of sale, signed ID photo copies and maprovide nya. Sa kanya din kami magbabayad ng cash at di sa affiliated bank nya. Kaliwaan naman daw ang mangyayare mauuwi kagad yung car pag fully paid in cash.Yung ORCR daw to follow nalang daw po.




Anonymous said...

Need Advice Admin,
I just want to know is it safe to buy a bank repo car from a self proclaim bank agent who said that the car has been awarded to him through bidding. My problem is he just can't easily give us the Original OR CR which is according to him will take 2-3 weeks to transfer it to my name ( from bank to agent then to me). He can just provide us the photo copies of OR CR, notarized Deed of Sale, signed ID photo copies and "Acknowledgement Receipt )"only . I just want to be sure na do kami maloloko.OK lang po ba na wala samin hung Original OR CR?

admin_TOL said...

Hi Anonymous,

Nowadays, it's really hard to identify a scammer from a legit agent as most of the time they appear more convincing than the latter. What I always recommend to people is to not transact with strangers and that's what I will also recommend to you... To me, his deal is shady. It does not matter if he gives you the car, but without the original papers, it will never be yours. You will be at the losing end, because he gets his money and what you get is a paperless car and a 2-3 weeks promise.. If he gets his money, he can run away for all he cares. For me that is a NO deal.. If I were that agent, I would fix the papers onset. I can't find a reason why he can't and won't do that.. I recommend to drop the deal or transact directly to the bank, not to some agent. Good luck.

Markjason said...

Thanks for enlightenment, more power to you, Sana marami pa kayung matulungan Admin thanks ulet

Anonymous said...

Planning to buy a bank repo 2015 model car from a buy & sell guy. He got orig OR CR and bank clearance the problem is "lost plate". Buyer na daw po maglalakad nun provide nya nalang daw ng affidavit of lost. Sa OR CR copy 130160 nakalagay sa plate number kaya do KO maverify sa LTO. Panu pa ba ako makakasiguro na maayos po hung rehistro?

admin_TOL said...

Hi Anonymous,

Do not ever transact with strangers who hand shady car deals like lost plates, lost OR/CRs, etc... These kind of deals will give you nothing but trouble and massive headache... I am sure you don't want that. If he is a true/customer oriented type of sales man, he wouldn't put the trouble of fixing the docs on his buyer. Clearly, what he wants is just to dispose the car, get his money, and vanish.. You will always be at the losing end brother... If you close this deal, he gets his money, he runs away, while you take your plateless car, clueless of the history, Lord knows it might be a stolen car, original plate number was thrown away and affidavit of loss secured from his neighbor lawyer. I may just be stating the worst but even then, it is not at all too comfortable of a deal. As you say, you can't even verify the car from LTO. That alone already is a red flag.. So my suggestion to you, don't even try to know how to verify the legitimacy of that car... drop the deal.

Again, relax, don't get excited. Spend time looking up for more prospects. If you are into bank repo cars, you can transact directly to banks... from there you are guaranteed with trust and confidence... Again cars cost a fortune and it is a total heartbreak to make mistakes so be wise in choosing and making decisions. Goodluck.

admin_TOL said...

Hi KY,

I guess the issue I see is trust and confidence.. Trustworthy people nowadays are rare specially when it comes to money. How would you know if the seller remits your mortgage money? You can ask for a copy of the bank deposit slip every month.
If he does not pay it, bank will repossess the car and there's nothing you can do about it.
I honestly find this deal quite underhanded, you mentioned the car still has 43 months left for mortgage, and then seller asks you to pay DP + 24 months. Is this a verbal agreement? I don't know the details of the deal but what happens after paying month 24 is a huge concern to me. Does this mean, the seller will cover the remaining 19 months??? I recommend you find a lawyer friend to draft a contract, meet with your seller, discuss these concerns, put every detail in writing, and make him/her sign 2 copies, keep 1 copy, so incase the seller runs away, you are armed for a legal battle. Good luck.


Hi! Theres a second hand car sold to us. The car still had 43 months installments with Toyota/Bank. We agreed that, I acquire the car in a total amount of 500k. 150k is downpayment, 350k to be paid directly to the seller monthly up to 24 months.

Do you see any issues with this? How will i know if the seller settled the amount due with Toyota/bank? If it gets worse that he didnt pay the bank after weve paid the whole amount to the seller, will the car be towed by the bank from us?

We appreciate the response the soonest. Thank you

KY

Unknown said...

Hello,

Good day!

What if the scenario would be like this:
Buyer 1 buys car from Seller 1 but has not transferred the ownership yet to him. Now here comes Buyer 2 who bought the car from Buyer 1. Still, the ownership of the car belongs to the original seller. Although the registration of the car is up to date, the ORIGINAL Certificate of Registration went missing/misplaced. Buyer 2 already used the car with all the documents except the Cert. of Reg. although Buyer 1 already processed the necessary papers for the lost CR (Affidavit of Loss, Police Blotter, Traffic Clearance, Stencil). Is it okay if Buyer 1 processed all of these? I mean the Affidavit of Loss under Buyer 1 as well as all the necessary documents?


Furthermore, Buyer 2 also would now want to transfer the ownership to him. What would be the remedy for this situation?

Your response to this comment would really be of great help.
Thank you & God bless!

-Michelle-

admin_TOL said...

Hi Michelle,

Yes it's okay. Depending on the arrangement, either Buyer 1 or 2 can process the documents but in the end, everything should be turned over to the one driving the car, and that is Buyer 2.

Before Buyer 2 can do that, he/she must have all the necessary documents including that lost CR. If Buyer 1 processed the lost CR then he/she can secure a new original copy from LTO and that must be turned over to Buyer 2. That, together with OR, 2 Deed of Sales(DOS of Seller to Buyer 1 and DOS of Buyer 1 to Buyer 2), Macro etching, TMG clearance, and some cash, Buyer 2 may now go to the nearest LTO branch and transact for transfer of ownership.

Thanks and drive safely.

Anonymous said...

Hello. I am planning to purchase a second hand car. I can find honda accord and mazda 626 sold below 100k. Would that be good buy? Would a 1994 accord incur high maintenance costs?thank you for this website and for your enlightening answers.i hope you continue with this good work.

admin_TOL said...

Hello Anonymous,

Would that be a good buy? Not a chance. Regardless of the brand, if sold cheap is absolute red flag. It could be cars with combinations of defects, expired registrations, lost docs, and all sorts of trouble hidden underneath the hood.

If a car is road worthy with "clean" papers, no matter how old it is, will not be sold that low, let alone a Honda or a Mazda. So I suggest that you follow all the steps that I recommend and don't get excited. Hold on to your money and collect as many prospects as you can and pick the best option.

Judging by the age, my answer is yes I believe that accord could cost you more maintenance money. But still it depends on how it was taken cared of by the owner. Not a huge fan of Accords but based on what I know, they are gas guzzler and that will definitely cost you more gas money than you should. But feel free to check it to find out. If you are not confident, tag along an expert with you when you check the unit.
Again, be smart and take as much time as you need. There are a lot of second hand cars out there and for you to find the best buy, more than money, you need to invest time as well.

Good luck and Thank you!

My Blog said...

Hi Admin,

I am currently looking for an affordable 2nd hand vehicle with at least 8-seater capacity. Finally I found one, the Mazda Friendee Bongo 2009. I love the look and specs, but I wonder why this model is being for sale at a very affordable offer. For a 2009 - 2010 model, the price would only cost Php120,000 - Php,150,000.00. This looks to me very tempting to consider but on the other hand, I wonder why this is being sell at that very cheap price? I would like to share the link of what I am referring to. Please help me to decide by giving awesome advise. Thank you so much in advance.

https://cars.trovit.ph/listing/mazda-bongo-manual-2009.1rQkCOs1G4

admin_TOL said...

Hi My Blog,

One obvious reason, it's an import. Bongos were not sold locally in PH. As you can see its license plate begins with B, meaning it was imported via Cagayan port and registered somewhere in Region 2. Most of these cars, if not all, went into shady importation and registration processes and now that government is implementing strict and straight rules, renewing registration is difficult to impossible so the better option is to sell these cars cheap. This may not always be the case but I know people with this type of trouble in hand. I would recommend you to buy locally distributed cars instead of these ones. Don't be charmed by these car deals because behind it lies a string of headache and disappointment when you make a mistake of buying them. Very seldom cars are sold cheap and clean.

If you have to, go and check that unit to find out. It's ok to look but make sure to keep your eyes open and not let excitement rule you over.

Good luck.

Unknown said...

Sir should I go for a diesel or gas car?
Which costs more to maintain? TIA

admin_TOL said...

Hi Bloodymer,

Diesel is cheaper to maintain than gas because diesel fuel is way cheaper than gas but will still depend on condition. A well taken cared second hand gas car that has a low mileage will obviously be cheaper to maintain than an abused, high mileage diesel car. I would recommend you to go for diesel but still make sure to check the car's condition. Good luck

Unknown said...

Thanks. I have another question, would you choose a top of the line 2013 car than a 2015 mid variant one? Both of them are in good condition and with low mileage.
TIA

admin_TOL said...

Hi Bloodymer,

Since both are in good shape, I will give premium to style and class so I would pick the top of the line. But still depends on what we are choosing, say a mid variant 2015 Toyota vios versus a top of the line 2013 Hyundai accent.. I would choose the Toyota... but that's just me. It will all go down to your preference, as along as you made sure both of them are in good shape and with clean papers, choose what your gut tells you. Good luck.

Unknown said...

Thanks sir! Your blog is very informative.

Anonymous said...

Hi Admin,

Good day, I am planning to buy a 2nd hand car with my budget around 100k. Ive spotted Kia Avella 2000s, Nissan March 2000s (Micra), Hyundai Atoz 2000s and Daewoo Matiz, out of these choices.What would you choose and why? These will be my first car.

Thanks in advance.

Al

admin_TOL said...
This comment has been removed by the author.
admin_TOL said...

Hi Al,

In all honesty, none of them. I don't and won't lay a bet on imports... unless we are dealing with R32 skylines or Evos.. When I say imports I mean those cars that were not locally released here in PH.. Avellas, matizs', atozs' and the like, they are Korean imports, except for Nissan Micra but even then.. What are my issues with imports? Well 1st, most if not all, their registrations are rigged and I'm personally not comfortable with it, particularly now that LTO is stricter. 2nd, to get away with paying diabolic amount of import taxes, importers will chop those cars in half, pull the parts apart, put everything in a container, ship them to PH, and declare them as spare parts ONLY. This will save them so much tax money. So once they have the shipment, they will put them back together, weld the frames, fill and sand the joints, paint it then sell it. Again, I am not going to compromise my safety driving those cars.
If my budget is around 100k, I will settle for local units. I bet you, that budget can buy a decent, clean and road worthy car. If I am looking for some muscle, I'd buy a Mitsubishi lancer Glxi, 4G92 1.6L 16V fuel injected engine, all power, manual transmission. Price ranges between 90K-110K. Or probably a Toyota Corolla big body, 4AFE 1.6L fuel injected engine. Price is between 100K-120K These cars are very reliable and known for durability. That's what I would buy, but that's me.
I suggest that you spend some more time looking for something else and not box yourself within those 4 options. If 100K is your budget, as long as you do your homework, research, and arm yourself with information, you can get a good, reliable, decent car.
Good luck.

Anonymous said...

Thank you admin for that informative reply.God bless and all the best.

Al.

fatimashaikh said...

Vehicle history check Thanks for a very interesting blog. What else may I get that kind of info written in such a perfect approach? I’ve a undertaking that I am simply now operating on, and I have been at the look out for such info.

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