Do you need a loan and have you thought about using your car ? Here's what you need to know and how to avoid unpleasant surprises.
Let's start then from the beginning, that is, to tell you what a mortgage is . This is a loan with a guarantee in case you do not return it. This time the guarantee is not a house, which lends you money can take if you do not pay, but directly your car. This is possible because the cars are " registered movable property ", ie marked in the name of the owner on a public register, which in our case is called PRA, in fact the Public Automotive Registry. The fact that the car is your right is guaranteed by the documents , that the certificate of ownership and registration certificate .
How to mortgage a car? I tell you how it should work. It is a loan that, in form, is similar to all others . Put a mortgage in favor of a financial institution or a bank that will give you an agreed sum, making you accept the " amortization plan ", ie a certain amount of installments that you will have to pay to repay the money lent and the interest that costs you all the operation. You do not even need to show that you have a salary large enough to pay regularly, since bills are often used for bills.
The law then provides a series of things to do , starting from communicating to the PRA that there is a mortgage on your car . It means that it is bound, but that you can continue to use it every day without limitations. When you communicate the PRA that there is a mortgage, this will follow your car even if you sell it, and will give the chance to those who lent money to expropriate it, that is to take it even if you have sold it in the meantime. If you have paid all the installments, however, the mortgage will be canceled and everything will return as before the loan.
All this works and maybe it's convenient, but only in theory . In real life there are a number of bad news I have to give you. Let's start from the costs . Registering a mortgage, that is, communicating it to the PRA, and then canceling it, asks you for two different acts of the Notary, which you pay, not less than 400 euros each. The law then provides that you can move freely with your mortgaged car, but in practice it is not.
The banks do not accept mortgages on cars, while some financial companies do, at least in words. It is in fact a " fiduciary loan ", which is very different. The fiduciary financing is made to you with the guarantee of the title of possession of the car, that is the certificate of ownership , but also the vehicle registration certificate , which are kept "in custody" by the financial company. So you can also get the money, but renounce to having your car available, which can not circulate.
Do you agree? No. Even if you get a loan, you will never receive more than 30% of the value of your car.