How are the agreements different?
According to experts interviewed by socialbites.ca, buying a car from a legal entity is not much different from a transaction with an individual. In both cases, the title documents are the same: vehicle passport (PTS) and purchase and sale contract.
“Actually, the only difference is that the contract is made with an organization, not a person.
The document is signed by the general manager.
It is worth remembering that subsequent legal problems, if they arise, are very similar in transactions with both an individual and a legal entity, Maxim Shelkov, head of the autocriminalist expert center, told socialbites.ca.
If the agreement is signed not by the head of the company, but by his employee, then he must act in accordance with the power of attorney and give a copy to the buyer. However, the power of attorney has all kinds of risks because the power of attorney can be revoked.
Therefore, it is better to sign the paperwork immediately with the general director of the company.
There are also organizations where the decision to sell the vehicle fleet is made only after a positive decision is made at the founders’ meeting. Such nuances are specified in the constituent documents.
If this is a car dealership
The legal entity that owns the car can be the car dealer – it must be included in the title. Salons often sell cars purchased from another driver, but not registered with the traffic police. In this case, the buyer must obtain a purchase and sale agreement signed between the car dealer and the previous owner.
The car dealer can take on the role of intermediary broker between the seller and the buyer and draw up a commission agreement; This document also needs to be collected by the final buyer.
Otherwise, the vehicle remains the property of the original owner.
even if the car dealership handles the process.
“Dealers often do not register the car with the traffic police, as it is not profitable to register everything themselves. For example, there is a risk that the seller will start receiving penalties from the new buyer.
It will be difficult to challenge and prove something later.
Therefore, car dealers sell a vehicle directly to the new buyer through a commission received from the previous owner, in order to avoid taxes and penalties,” explained Sergei Radko, lawyer of the Freedom of Choice automobile movement.
In this case, all rights that the buyer has regarding the vehicle after the transaction are transferred to the first owner.
Main risks
Experts say that buying a car from a legal entity has many pitfalls that you should be aware of in advance.
The first risk is that the car will be pawned. Today, many legal entities purchase vehicles under a leasing agreement. The second risk is that the legal entity is either in a pre-bankruptcy state or is already on the verge of bankruptcy and sells the car at a discounted price, says auto lawyer Lev Voropaev.
According to him, the car sale transaction under the bankruptcy procedure will be considered invalid. The vehicle will then be seized from the new owner by court decision and added to the bankruptcy estate. The expert warns that as a result, the buyer will be deprived of everything.
It is almost impossible to get a refund from a bankrupt legal entity,
Voropaev noted. Automobile lawyer Sergei Radko added that many car dealers can also operate on credit.
“There were already stories about dealers or sub-dealers operating using bank loans: They had cars as collateral, and then when they couldn’t pay, procedures began to seize the car, foreclose, go bankrupt, etc.,” he warned.
Autocriminalist Maxim Shelkov confirmed that the legal entity can go bankrupt at any time.
“You buy a car today and the company will start bankruptcy proceedings within a month or a year. From now on, all completed transactions will be brought to the agenda,” said the expert.
How do you protect yourself?
The first thing that should alert you is the cost of the car. If the price of a car is 20-30% below the market price, it is likely that there are signs of bankruptcy of this legal entity. Therefore, Radko, lawyer of the Freedom of Choice movement, advised that you should buy a car only at the average market price close to reality.
According to him, then you need to check if there are any liens on the car, find out how many times it changed hands and when the company bought it. At this stage, it is also important to check whether the legal entity has any lawsuits or enforcement proceedings. Their presence also indicates the company’s risk of bankruptcy.
“It is necessary to check the existence of this car in the repossession records using the VIN code. It is also better to get a document from the notary called “Extracts from the mortgage registry”.
It should be noted that such a car is not listed in the register.
This is necessary so that it can later be proven that the driver actually checked the legality of the vehicle and acted conscientiously and with common sense,” Radko said.
Autocriminalist Shelkov added that some legal entities trying to sell cars, upon closer examination, turned out to be companies with a dubious reputation.
What are you thinking?
Source: Gazeta

Anika Rood is an author at “Social Bites”. She is an automobile enthusiast who writes about the latest developments and news in the automobile industry. With a deep understanding of the latest technologies and a passion for writing, Anika provides insightful and engaging articles that keep her readers informed and up-to-date on the latest happenings in the world of automobiles.