← Liens on trade-ins and repairs

Liens on trade-ins and repairs

5 questions. Pick an answer and the explanation reveals below it. Your score updates as you go.

1. Question 1

   In the context of an OMVIC-registered dealer's obligations, what does it mean for a vehicle to have "clear title"?

   • A The vehicle has a current valid plate sticker registered to the dealer
   • B There are no liens registered against the vehicle
   • C The vehicle has passed a Safety Standards Certificate inspection
   • D The vehicle's prior owner has signed the back of the permit

2. Question 2

   A dealer takes a customer's financed car as a trade-in and agrees to pay out the remaining lien. According to OMVIC, when must the dealer make that payment?

   • A Within five business days of taking the trade-in
   • B Within 14 days of registering the new sale
   • C Immediately
   • D Once the trade-in has been resold to a new customer

3. Question 3

   Under the Personal Property Security Act, what step perfects a lender's security interest in a financed motor vehicle so that a later VIN-based lien search will reveal it?

   • A The borrower signing the loan agreement
   • B The lender taking physical possession of the vehicle
   • C Registration of a financing statement
   • D Notarization of the loan documents

4. Question 4

   A registered dealer's inventory is subject to a perfected floorplan security interest held by the dealer's lender. A retail customer buys a vehicle off the lot in the ordinary course of the dealer's business and is told at signing that the floorplan lien exists. Under section 28 of the Personal Property Security Act, does the customer take the vehicle subject to the floorplan lender's interest?

   • A Yes, because the customer knew about the security interest before buying
   • B Yes, because the floorplan interest was already perfected by registration
   • C No, because a buyer in the ordinary course takes free of a security interest given by the seller, even when the buyer knows about it
   • D No, but only if the customer paid the full purchase price in cash

5. Question 5

   A repair shop is in possession of a customer's vehicle and has a possessory lien under Part I of the Repair and Storage Liens Act for unpaid repair charges. A bank perfected a Personal Property Security Act security interest in the same vehicle two years earlier. While the repairer still has possession, whose claim ranks ahead?

   • A The bank, because its security interest was perfected first in time
   • B The bank, because Personal Property Security Act registration always takes priority over repair liens
   • C The repairer, because a Part I possessory lien has priority over the interests of all other persons in the article
   • D Neither claim has priority; the proceeds are split pro rata