Buying a car under a general power of attorney: risks and features

What is a general power of attorney?

A general power of attorney is an official document (necessarily certified by a notary), which allows one person (trustee) to perform actions on behalf of another person (principal) who issued it.

In the case of a car, the principal transfers the car to a second person for use on his own behalf.

An authorized person (the person who will manage the car) will be able to drive the vehicle, sell it, exchange it, lease it to a third party, entrust it, and go abroad.

Important: the motorist can perform all these actions only if the power of attorney does not contain additional clauses limiting the actions of the authorized person.

The maximum term of a power of attorney is 3 years.

Also read: What are the risks of buying a credit car?

Advantages of a general power of attorney for a car

The main, and probably the only advantage, thanks to which the procedure for registering a gene.
power of attorney for a car is so popular, there is a significant saving (and not only money is saved, but also time). However, even these benefits are regulated by the notary whom both parties choose to conduct the transaction. Depending on the cost of the notary’s services and the queue for an appointment with him, the imaginary advantages of a power of attorney may turn into disadvantages. Also, upon receipt of the right to use a car, the buyer is relieved of the obligation to re-register the car at the traffic police department, even if the car is registered in another city. The trustee also receives the right to sell the car with all the ensuing benefits. The only thing you should not forget about is a specific indication of all clauses regarding the sale and use of the car in the contract.

What is the difference between a general power of attorney and a purchase and sale agreement?

Let us consider here several criteria by which we compare a purchase and sale agreement and a general power of attorney for a used car:

Car license. A general power of attorney (GP), unlike a purchase and sale agreement, does not make the trustee the owner. This poses additional risks for both the buyer and the seller. We will talk about them below.
The service life after which the document becomes invalid. The GD has a term (maximum 3 years). The purchase and sale agreement has no expiration date.
Complexity of design. When drawing up a purchase and sale agreement, it will take more time and effort. A general power of attorney for the purchase of a car will only require drawing up and certification by a notary, as well as a receipt for the transfer of funds.

Also read: How to check engine number when buying a car

What to do if you unknowingly bought a loaned car as collateral

Buying a used car is always a risk, since you are entrusting a large sum of money to a stranger, and in the end you may well end up purchasing a “Trojan horse”.

Recently, cases of car loan fraud have become more frequent, when criminals receive a loan for a large amount, buy a car and immediately sell it to a stranger.

As a result, the pledged property must still return to the bank, and the unlucky buyer is left without transport and without invested funds. What to do if you bought a credit car?

First steps when detecting fraud

So, the situation: I bought a credit car, what should I do? Unfortunately, most often the buyer finds out about this too late, sometimes more than a year passes from the date of purchase.

All this time, the bank sends messages to the borrower, calls on him to repay the debt and tries to find the client at the addresses specified in the questionnaire. During this time, the fraudster easily manages to leave for another city, and finding him is problematic.

As a result, the bank puts the car on the wanted list, and the police officers will stop the new buyer at the first traffic police checkpoint.

What can happen if you unknowingly buy a loan car? By court decision, the car will be seized, and the bank has the right to put it up for auction.

The credit institution doesn’t care who will repay the debt; it just cares not to lose the invested capital.

Because of this, the buyer faces a difficult choice: either take on someone else's debt or give up the car. What to do if you bought a credit car?

Contact the police and put the fraudster on the wanted list. If the deal was concluded recently, perhaps the person can still be found. Information about the seller is indicated in the contract, and there is a chance for a successful outcome.
Contact the bank and explain the situation. You need to prove that you yourself did not sign the loan agreement, and the bank cannot have any claims against you personally. However, the car is still considered collateral, and the credit institution has the right to demand it back. Bank specialists may offer you to take out a loan for yourself if you still want to keep the car.
File a lawsuit against the seller. 1 tbsp. 460 of the Civil Code of the Russian Federation, only property free of any encumbrances can be put up for sale, and a transaction with a credit car must be declared illegal. However, consideration of the case and receipt of some kind of compensation is possible only if the seller is found. Otherwise, you will still have to resolve all issues with the car yourself.

What happens if you buy a credit car: can you sell it? There is such a thing as assignment of claims. With the bank's permission, you have the right to transfer the car to a third party if the debt is fully repaid.

That is, you find a buyer, he pays the debt for the car to the bank and takes the car, and you can receive the difference in the amount. This option only makes sense if you manage to find a buyer willing to buy the car at a price higher than the amount of debt.

Under no circumstances should you sell a car without communicating that it is under a loan. Such actions are classified as fraud, and such seller is subject to criminal liability. If you don’t want unnecessary problems, it’s easier to give the car away and hope that a seller will be found.

How to avoid fraud?

The question of what to do if you sell a credit car can be avoided if you approach the transaction responsibly. Fraudsters work according to approximately the same schemes, and you can find out in advance what to do to avoid getting scammed by a credit car. First of all, this is attention to documents, but there are other factors. When buying a credit car, what should you pay attention to?

If the car is under loan, its main document, the title, must be kept in the bank. The fraudster has to receive a duplicate, which must be marked on the title page. However, in our country there are agreements between traffic police officers and dishonest sellers, so there may not be such a mark. Pay attention to the date: if the car was produced in 2010, but the title was issued in 2013, this is clearly a duplicate.
You cannot agree to transactions under a general power of attorney. It will not make you an owner, and in the end, a car bought on credit will still be taken away by a court decision. The seller must provide a complete set of documents, deregister the car and transfer the title to the new owner.

Write down the seller's passport details. They will significantly help in his search if it turns out that a scam took place. If the seller refuses to provide passport details, citing various excuses, it is better to refuse the transaction.
You can try to check the car through a credit bureau. A unified database is just beginning to take shape, and such a check will not provide a complete guarantee, but there is a possibility of success. If the car was once purchased on credit, check the dates. The usual loan term does not exceed 5 years; if more time has passed, most likely the loan has already been repaid.
Watch the seller carefully: if the owner is fussing, offering a low price, trying to complete the deal as quickly as possible - all these are warning signs. Find out why the car is being sold so cheaply, check every word against the condition of the car.

What to do when you buy a credit car? This is an extremely unpleasant situation that will definitely bring great trouble and trouble. The new owner will have to prepare for litigation and a lengthy process. It is possible to refuse the purchase and simply transfer the car to the bank, but then the money invested in the purchase cannot be returned. The question of what to do if you bought a credit car is increasingly heard on forums. The reason for the prevalence of this phenomenon is the lack of a unified framework and the imperfection of legislation. You have to be careful about transactions and not take the sellers’ word for it.

>>> SUBSCRIBE to our channel in Yandex.Zen

Publications on the topics: how to profitably take out a car loan, which car to choose for credit - new or used, conditions for car loans in banks, how to repay a target car loan ahead of schedule, CASCO and MTPL insurance for a loaned car. The editors of the site “AutoCreditExpert” help you understand the nuances of obtaining and servicing a loan to buy a car

Total score: 8 Lost: 5

Source: https://eAvtoKredit.ru/page/chto-mozhet-proizojti-esli-priobresti-kreditnyj-avtomobil

What are the advantages and disadvantages of buying a used car by proxy?

The main advantage is that such a deal saves buyers money, time and effort, that is, you avoid the bureaucratic side of the sale and purchase, re-registration of the car, changing license plates and other components.

There are quite a lot of negative sides to a “transaction based on trust”, and before you buy a car using this method, familiarize yourself with all the risks that Autocode has prepared for readers:

The owner of the car can revoke the power of attorney at any time and return the vehicle back. The buyer, in turn, can go to court to return the money if a receipt for the transfer of money has been preserved. But this will also take several months and require the assistance of lawyers, which also entails large expenses.
It is worth paying attention to one more risk when buying a used car. In the event of the death or incapacity of the owner of the car, the power of attorney ceases to be valid, and the vehicle becomes the object of inheritance by relatives of the legal owner. And the buyer loses his money along with the car.
When purchasing, you should also take into account the validity period of the certified document (maximum - 3 years, if the period is not indicated on paper - 1 year).
If the legal owner is going to get a divorce, and the car is considered joint property, the buyer will also have to say goodbye to the purchased “iron horse”.
The inability to independently file a lawsuit to compensate for damage caused by another driver in the event of an accident.
Another risk that the buyer may face is the confiscation of the vehicle if the car is listed as stolen. To return the “iron horse” you will have to find the rightful owner and ask him to write a statement.
If you want to avoid such a risk (make sure that the car you are purchasing is not stolen), use the Autocode service. To do this, go to the main page of the Autocode website and enter the license plate number of the vehicle into the search bar. Next, you can purchase a report with information about the owners, technical characteristics of the car you are interested in, as well as thefts, restrictions and other information about the car. Thanks to this, you will be convinced that the person “selling” you a car under a general power of attorney is not a fraudster. If you are a professional car seller, use the “Autocode Pro” unlimited car check service. “Autocode Pro” allows you to quickly check a large number of cars, add comments to reports, create your own lists of liquid vehicles, quickly compare options and store data about cars in an orderly form. A subscription to unlimited car checks costs 2,500 rubles per month.
The inability to independently file a lawsuit to compensate for damage caused by another driver in the event of an accident.

Also read: Bargaining when buying a used car: how to reduce the price of a used car

Sample power of attorney for the purchase and transportation of a car

Deadlines

As already described above in the article, the term of the power of attorney can be from a month and no more than 3 years. If the date and period of validity are not indicated, then in accordance with the law, the period is 12 months. On the basis of this power of attorney there may be another one, but its term should not exceed the main power of attorney.

Renewal of power of attorney

As is known, the term of a power of attorney cannot exceed three years. After this time, the document loses its legal force and ceases to be valid. A document can only be renewed by the person who issued it - the principal. He can either extend it to the same person or issue it to another for a period that does not exceed the period specified in the contract.

What is important to consider when buying a car under a power of attorney?

If a car enthusiast nevertheless decides to buy a car “through a notary,” then Autocode recommends providing the following points:

Make sure that the seller is the sole owner of the vehicle.
Check the technical specifications for the vehicle you are selling.
Be sure to draw up a receipt for the transfer of funds, this will protect against premature revocation of the general power of attorney.
Don't forget to have the receipt certified by a notary, otherwise it will be invalid.

When drawing up a power of attorney, carefully read the document, make sure that there are no clauses limiting the use and disposal of the power of attorney. Also make sure that the notary has a copy of the document. This is very important, since in the future this document will help the buyer in resolving disputes.

Also read: How to purchase a used car: general transaction procedure

How to properly issue a general power of attorney for a car

The responsibility for drawing up a power of attorney and registering it with a notary always falls on the owner of the car. It is important not to lose sight of all amendments made to the document: all current versions of the document form can be found on the Internet, in case a particular notary loses sight of them.

The general power of attorney is also filled out by the owner, while the place with the date and signature must be left empty - they are filled out only in the presence of a notary.

Be sure to indicate the date the document was drawn up and its validity period (by default, the validity period of a general power of attorney for a car is 1 year, the maximum validity period is 3 years).

Buying and selling a car by proxy. How not to get caught out of money

The only way to avoid problems in the future is to register the transfer of ownership of the car under a purchase and sale agreement or a certificate-invoice. In other cases, you will have to rely on the integrity of the seller and his relatives. In addition, legally unclean cars are often sold by proxy. In any case, it is recommended to use the services of a lawyer.

Today there are several options for purchasing a car:

Buying a vehicle from friends.
This option is the most preferable. Here you don’t have to worry that the cost of the car will be too high, and that there will be unforeseen pitfalls in the technical part itself. But we can’t talk about 100% success here, because there may be problems with paperwork. Over time, the machine may break down, causing maintenance problems and additional expenses. As a result, relations with the old owner may be damaged. But even despite this fact, drawing up a power of attorney seems to be the most relevant solution (with the right approach).

Buying a car directly from the previous owner.
This method is also convenient and reliable. It is worse than the one discussed above, but better than cooperation with resellers. It’s easier to negotiate with sellers and, if necessary, lower the price a little. But even here there may be pitfalls that need to be kept in mind. For example, a seller may insist on selling a car under a general power of attorney with the subsequent inclusion of a new driver in the insurance policy. The advantage of this registration is obvious - it takes much less time and effort, but on the other hand, using this registration method is dangerous. Thus, when buying a car by proxy, you do not need to undergo a technical inspection, and traffic police officers do not check the car for theft and other problems. Consequently, the buyer is at risk for a long time and must contact the former owner to resolve priority issues. The second situation is when the seller offers to deregister the car for money (this is an accelerated option). It is not recommended to agree to this path, because the car must go through the entire deregistration cycle. Otherwise, after completing the transaction, it may turn out that the car cannot pass a medical examination and be registered. For example, if you put a spare part from a domestic car on a foreign car, the result is problems with passing maintenance. To avoid such difficulties, it is important to insist on a complete technical inspection procedure. Moreover, in recent years such “modifications” have become commonplace.

The third way, which should be resorted to only in extreme cases, is purchasing a car from resellers
, that is, people who are engaged in this type of business and resell cars almost every day. It is difficult to “agree” with such people, because they know the real price of each car and understand the psychology of buyers. If you give preference to this option, you need to do two things - insist on undergoing a full service station and refuse to register the vehicle by proxy.

The fourth option is to purchase a vehicle from a large car dealership.
If you work with a trusted dealership, you can be confident in the technical condition of the car (if it is new). When it comes to a used car, you need to be careful. The concept of “car dealership” is vague for each region and may vary. If in a large city this name hides a rich dealership, in small towns we can talk about a small parking lot. By the way, parking salons have become increasingly popular in recent years. “Medium” salons, as a rule, offer installments or registration at their own expense. Here, if you wish, you can choose a decent used car, but it is still undesirable to buy a vehicle without maintenance. As for large salons, they rarely work with consignment cars, but sometimes they appear on sale.

Above we looked at what the features of the document are and in what cases it becomes invalid. An equally important issue is the actions that can be performed with the vehicle. For example, a power of attorney allows the attorney to handle various tasks - from ordinary use to sale. So, after issuing a power of attorney, the new owner has the right to remove and register the car, change registration data, dispose of or repair the car. In addition, the owner of the car can issue a power of attorney from a notary to perform any actions - for example, undergoing maintenance. But that's not all. If you look at Article 182 of the Civil Code of the Russian Federation (clause 3), the attorney has the right to do one more job - re-register the car in his name.

Many questions are asked regarding the need to contact a notary when purchasing a car by proxy. This is mandatory if the document gives the recipient the right to perform any actions with the machine. You cannot do without a notary if the car is issued for driving, registration, purchase/sale or maintenance. In addition, the participation of a legal specialist is necessary if we are talking about the transfer of a vehicle from one person to another. In this case, the documents are drawn up in such a way that the term of the new power of attorney does not overlap the period of validity of the first document. In case of transfer, the owner must be notified. If this does not happen, the transferor is responsible for the person to whom ownership of the vehicle is transferred, and not just for his own actions. There is also such a term as “general power of attorney”. This document must also be notarized. The point is that the “general” opens up a whole range of possibilities for the owner. If for any reason the case is brought to court, a general power of attorney cannot be avoided.

The peculiarity of the document is that there are no special requirements for filling it out. The paper must contain information about the principal and the person to whom the power of attorney is being transferred. In addition, the period of validity and the possibility of reassignment are prescribed. The day of issue, as well as the signature of the principal, must be indicated here. As for passport data, their indication is not mandatory, but it will not be superfluous. If we are talking about a general power of attorney, it must contain information about the right to dispose of (ownership) of the vehicle, as well as the right to carry out other actions with the car - obtaining insurance, selling, transferring and others. In addition, a power of attorney allows you to represent interests in court, the traffic police and other authorities.

General power of attorney. The price for stinginess

Armed with a documented scope of authority, the buyer can proceed directly to the purchase. Like a power of attorney, a car purchase and sale agreement can be drawn up in any form or according to a template , which can be obtained from any law firm or on specialized websites on the Internet.

Mandatory points of any such act:

a header with the name of the document, place and date of preparation;
information about the parties to the transaction “Seller” and “Buyer” - full name, passport details, registration addresses, dates of birth;
subject of the transaction - all data from the PTS and STS, from the brand to the identification numbers;
cost – the price is written both in words and in numbers;
confirmation of the absence of fines and encumbrances on the car;
signatures of the parties.

The nuance of drawing up a written contract by proxy of the buyer is shown in the first column. There you should indicate not two persons, but three:

old owner - seller;
de facto buyer, indicating his status and document confirming his authority;
de jure buyer - the principal in whose name the car is purchased.

car purchase and sale agreement by power of attorney
car purchase and sale agreement by power of attorney

The agreement is drawn up and signed in three copies - one for each of the parties and a copy for the registration department of the traffic police. The current Civil Code requires mandatory state registration only for transactions with real estate.

But at the request of the parties, the contract for the purchase of a car can be drawn up at any notary office . For those who are not confident in their ability to correctly draw up a document, this option would be preferable, especially when it comes to buying a vehicle not for themselves.

According to current regulations, it is not difficult to authorize the purchase of a car on your own behalf. The undoubted advantages of “dealing at a distance” include:

saving the buyer time - no need to take time off from work or interrupt the trip;
expansion of available places of purchase - relatives or friends in another region will help;
the opportunity to buy, bring home and register a car without a driver’s license.

The potential risks and disadvantages of such purchases relate primarily to the identity of the trustee. Even if the selection of the car and negotiations on the price were carried out by the future owner himself, the guarantor must:

make sure that the technical condition of the car at the time of transfer corresponds to what was agreed upon (you can find out how to check a car before purchasing here);
check the documents of the seller and the car, check the license plates;
take responsibility for the correct execution of the transaction;
transfer the money to the seller in full, on time and in the agreed manner.

An error, incompetence or dishonesty of the trustee at any of these stages can result in additional hassle and expense for the owner.

The liberalization of legislation in the field of purchase and sale of vehicles that has occurred in recent years has freed the process from intrusive government control, and, in fact, the successful course of the transaction and the subsequent successful operation of the car depends only on the buyer and the correct choice of the person who can be trusted to buy the car.

From the seller's side

1. A valid passport of a citizen of the Russian Federation. 2. PTS (Vehicle Passport) - original. 3. Vehicle registration certificate - original. 4. Notarized power of attorney for the sale of the vehicle by the owner’s representative.

From the buyer's side

1. A valid passport of a citizen of the Russian Federation. 2. OSAGO policy, without which it is prohibited to drive a purchased car.

1. Before drawing up a contract for the purchase and sale of a vehicle, check the identity of the seller with the documents provided by him: a valid passport of a citizen of the Russian Federation, a notarized power of attorney of the owner, a certificate of registration of the vehicle and PTS. 2. Check whether the vehicle you are purchasing is not subject to collateral, whether there are restrictions on registration actions, whether fines have been imposed based on the vehicle number, whether the vehicle is a credit vehicle and whether it is under arrest. 3. Based on the result of the transaction, enter the new owner of the vehicle into the title, indicating the number of the document on ownership and the date of purchase, and also ask the seller to sign and put his signature.

How to correctly draw up a written transfer of authority between individuals?

Let's look at how to draw up a power of attorney for a transaction to purchase a car from an individual to an individual. To purchase a car without being present at the transaction, the buyer will need to transfer the right to purchase to a third party. This procedure will consist of several stages:

The buyer determines the person to whom he will transfer his authority to complete the transaction.
The parties, having presented their passports, issue a power of attorney. The document can be drawn up in simple written form or certified by a notary.
The attorney performs the action specified in the power of attorney.

If the parties do not contact a notary, then when drawing up a purchase permit yourself, you need to carefully check the contents of the document. It must contain the following information:

place and date of signing;
Full name, passport details, addresses of both parties;
the rights and powers that the attorney will have under the document;
personal signature of the principal, sample signature of the attorney.

If the parties do not contact a notary, then in the text of the document the fields where the vehicle identification data is entered can be left blank. When concluding a transaction, the attorney can enter them himself. If the document is to be certified by a notary, then there should be no empty fields, otherwise the notary will refuse to certify it. In this case, indicate that the authority applies to the purchase of any car.

The nature of a power of attorney - what are its weaknesses?

We have already said that this document was not intended as a method of selling a car. The paper served to transfer control rights and, in some way, dispose of transport. Also, a person wrote out a power of attorney for his brother/friend if he could not get to the traffic police for re-registration during the sale, entrusting the representation of his interests to another person. Today this nature of the power of attorney has remained only in the legal field; in practice it is used differently.

It is worth considering the following pitfalls:

the owner who is entered in the PTS, as well as for whom the vehicle registration certificate has been issued, is the full owner of the car, despite the issued power of attorney;
the buyer does not record in any way the amount of funds transferred, so that in legal proceedings for fraud, for example, specific amounts will not appear;
the buyer is not the owner of the car, he only has the right to perform certain actions related to the operation and maintenance of the car, its deregistration;
the buyer cannot put the car in his name, having only a power of attorney, this contradicts the principles of Russian legislation and complicates the situation of re-registration of the car;
the seller can cancel the power of attorney, and the document is automatically canceled if the owner dies, is declared incompetent, or is missing.

These are the kinds of troubles that can await the parties when completing a car purchase and sale transaction through a notarized power of attorney. This is also complemented by the fact that the document has a certain validity period. It is important to remember until how long the power of attorney is valid, so as not to get into trouble in the form of a canceled document and the transfer of ownership of the vehicle to the original owner. Moreover, the law will be on his side in this case. Even confirmation of the transfer of money will not change the situation from a legal point of view.