The short answer: with a retention of title, the car cannot go into your name until the finance company cancels it or you take over the debt. With a seizure it can, but the seizure travels with the car and you have to sign that you know about it. With an immobilisation order the owner is changed, but you are not given a registration certificate. The first step is to get the vehicle report and see exactly what is recorded.
In this article
What is happening to you
In Spain the buyer has thirty days from the purchase to apply for the change of ownership (article 32 of the General Vehicle Regulations). When you try, the Traffic Office (DGT) checks the Vehicle Register. If it finds a restriction, it tells you and, depending on which one it is, either stops the application or lets it go ahead with conditions.
The three situations look alike from outside and are very different inside.
Retention of title (reserva de dominio)
It appears when the car was bought on finance. The finance company keeps ownership until the last instalment is paid and records this in the Register of Instalment Sales of Movable Property, which is kept by the registrars and is now part of the Movable Property Register (article 15 of Act 28/1998). From there it is noted at the Traffic Office. While it is on record, the DGT only changes the owner if the cancellation is proved or the finance company consents (article 32.7 of the Regulations).
One detail explains many of these cases: the retention of title does not disappear by itself when the loan is paid off. It has to be cancelled. Many sellers finished paying for their car years ago and never did the paperwork. That is the easy case.
Seizure (embargo)
It is ordered by a court or a public body (the tax office, Social Security, a town council) over the registered owner's debts. It does not prevent the transfer: the DGT changes the owner, tells you the seizure exists and passes your details to the authority that ordered it (article 32.8). The DGT asks you to sign a document saying you are aware of the situation, or for it to be clearly stated in the contract. The problem is that the seizure stays on the car, and whoever ordered it may end up auctioning the vehicle to collect a debt that is not yours.
Immobilisation order (precinto)
This goes one step further: the authority orders that the car must not be driven. The DGT changes the owner but does not issue the registration certificate until the order is lifted. You will have a car in your name that you cannot use.
All of this can be seen before buying, in the charges section of the vehicle report. How to request it and how to read it is in the DGT report before buying a used car.
"A retention of title stops the transfer. A seizure lets it through, but comes along with you."
How a retention of title is cancelled
If the loan has already been paid off
- Ask the finance company for the cancellation letter. This is the document in which it agrees to cancel the retention of title. It is requested by the borrower, that is, your seller. There is an official form for it.
- File it at the Movable Property Register of the province where the retention was recorded. The Register cancels the entry and charges its fee.
- Check that the charge has gone at the Traffic Office too. Get a fresh vehicle report before going on. If it still shows, the Register's document confirming the cancellation has to be taken to the DGT.
- Do the ordinary transfer. Now with nothing in the way. The steps are in transferring a car between private individuals.
If money is still owed
There are two routes. The first is for the debt to be paid and the finance company to issue the letter. If you have not yet handed over the full price, pay that part directly to the finance company, against a statement of the outstanding debt, and the rest to the seller. The second is to take over the loan yourself, with the finance company's agreement. In that case the DGT processes the transfer with the subrogation document, which is requested from the Movable Property Register, and the retention of title stays on record until you finish paying. The DGT fee for transferring a vehicle with charges is fee 1.5, €55.70.
If the finance company does not answer or no longer exists
This happens with finance companies taken over by others, or with loans that were assigned. You have to find out who holds the loan today and, if there is no way of getting their consent, ask a court for the cancellation. It is slower, but there is a way through.
What happens with a seizure
A seizure is not removed at the Traffic Office. It is lifted where it began: at the court or public body that ordered it, and normally by paying the debt. These are your options, in this order:
- The seller pays and asks for it to be lifted. That is his responsibility. Insist on the document proving it has been lifted and check that it no longer appears in a fresh report.
- You pay the debt and deduct it from the price, if you have not yet handed everything over and the amount of the seizure is known and lower than what remains to be paid. Always with a receipt from the authority.
- Undo the purchase. If the seller hid the seizure from you and does not sort it out, you can ask for the contract to be terminated and your money refunded, with damages (article 1124 of the Civil Code).
Do not transfer the car "to get things moving" with the seizure still live if you do not know how much it is for. You will be putting in your name a car that answers for someone else's debt.
If you have already paid the seller
- Gather what you have: contract, proof of payment, messages and the advert in which the car was offered.
- Get a full report to find out what the charge is, in whose favour and since when.
- Send the seller a formal written demand, by burofax, to cancel the charge within a set time or give the money back.
- If he walks away, claim. In the civil courts, termination of the contract and refund of the price. And bear in mind that selling something while hiding that it carries a charge is punishable under the Spanish Criminal Code (article 251), so a criminal complaint is also possible where there was deception.
- If you bought from a dealer, complain to the dealer in writing first: a dealer answers for what it sells and has more to lose.
In the meantime the car is still in the seller's name, and the fines and road tax will keep going to him. That is one more reason for him to want it fixed. We cover the opposite case in I sold my car and the buyer has not transferred it.
Mistakes that make it worse
- Trusting "that's paid off, it's only a piece of paper". It may be true. Let him prove it with the letter from the finance company.
- Letting the thirty days go by without doing anything. File the application or, at the very least, put in writing why you could not.
- Paying in cash with no contract. Without proof of payment, claiming is much harder.
- Forgetting the other requirements. To be transferred, the car must have the previous year's road tax and any outstanding fines paid.
How to avoid it next time
Get the DGT report on the same day you are going to pay, not a week before. Check that the seller is the registered owner. If any charge shows up, hand over no money until it has been cancelled and you can see that in a fresh report, or pay directly to whoever holds the charge. And state in the contract that the car is sold free of charges, with the date and time of handover.
When it makes sense to get help
When the finance company does not reply, when the seizure comes from a court and you do not know the amount, or when the seller has stopped answering the phone. These are procedures that get solved by knowing whom to approach in each place, and that is what a vehicle agency with a lawyer is for.
Frequently asked questions
Can I register a car with a retention of title in my name?
Not until the retention of title is cancelled at the Movable Property Register or the finance company consents to the change. The other option is to take over the loan with the finance company agreeing.
How is a retention of title cancelled in Spain?
The borrower asks the finance company for the cancellation letter and files it at the Movable Property Register where it was recorded. Once the entry is cancelled and it no longer shows at the Traffic Office, the car can be transferred.
Can a car with a seizure order be transferred?
Yes. The Traffic Office changes the owner and warns the buyer, who must sign that they know about the seizure. But the seizure stays on the car until whoever ordered it lifts it.
What if the car has an immobilisation order?
The owner is changed, but no registration certificate is issued, so you cannot drive it until the order is lifted.
I have paid and the seller will not cancel the charge. What do I do?
Send a formal demand by burofax to cancel it or refund the money. If he does not, you can ask for the contract to be terminated and, if he hid the charge from you, report it.