“More and more banks are adding clauses to their sales and leasing contracts to include everything that a customer owns,” warns Don Shilling, president of General Equipment & Supplies in North Dakota. These blanket-type financial documents can be worded to include all of the owner’s equipment, including future acquisitions. Unless the entire contract is paid and satisfied, the vehicle being offered for sale may not be cleared to sell. This is especially important if you are buying equipment from a private party or a third-party broker.
“Dealers do a good job of checking on this and also carry insurance that protects the buyer if there is a problem. The auction houses are also doing a good job of checking because there has been greater emphasis on it,” Shilling says. He says his company has been seeing an increase in this activity in his upper Midwest locations.
It is your responsibility to make sure there are no liens on the vehicle. Do a Uniform Commercial Code (UCC) search. (A UCC is a public filing notice between two parties, such as a bank and a private equipment buyer, where the vehicle is pledged as collateral for the loan.) Most states have a central filing location, often within the Secretary of State Department. Search ‘UCC Filings.’ You will find free name searches but may be charged for detailed reports. More information here.