After purchasing, I have no property rights and still need to take out a bank loan? The sales routine of delayed transfer of “0-kilometer used cars”

Recently, second-hand car buyers from many places across the country reported that they had purchased a 90% new second-hand car at a low price from a car sales company in Qinhuangdao, Hebei Province. In the end, it was discovered that what was obtained was a mortgaged car with no title and a bank loan.

There are even new buyers who are towed by the original owner across provinces without knowing it. The car sales company is suspected of reselling the same car while finding someone to take on the car loan, and using the car’s “trade-in” subsidy as an excuse to delay the transfer. What are the facts?

In October 2025, Mr. Lu (pseudonym) from Tieling, Liaoning Province saw a second-hand car sales advertisement on a short video platform and established contact with a salesperson from Hebei Qinhuangdao Zhongdian Automobile Trading Co., Ltd. After that, he paid 66,000 yuan to the company and purchased a second-hand car in full.

呂先生：The sales advertisement was broadcast live by the salesperson, saying that this was a used car with 0 kilometers, so I added WeChat to find out. At that time, it was said that the car had no mortgage, and the contract stated that it would be transferred between 6 and 13 months. The salesperson said they would return the car to me if it didn’t come through. I went to sign the contract in person and paid the full amount.

After picking up the car in Qinhuangdao in December last year, Mr. Lu is still driving the car normally. He has been waiting for the automobile trading company to notify him that he can handle the transfer normally. It wasn’t until September this year that he discovered that there was an outstanding bank loan in the car’s name.

呂先生：After I saw the company’s notification letter on September 20, I checked the vehicle file and verified the financial institution, and found out that the car had a mortgage loan. At that time, the car was borrowed for 80,000 yuan, and now it has paid off 11 installments, with more than 60,000 yuan left in the loan.

On December 5, 2025, the vehicle transfer agreement signed by Mr. Lu, Party B, and Qinhuangdao Zhongdian Automobile Trading Co., Ltd., Party A, shows that the two parties agreed that Party A should apply to the Vehicle Management Office for transfer registration procedures before November 14, 2026, and transfer the vehicle ownership to Party B’s name.

△Vehicle transfer agreement signed between the company involved and the second-hand car buyer (photo provided by the respondent)

The reporter noticed that the terms of the agreement did not specify that the transferred vehicle would not have a bank mortgage loan. However, the screenshots of the chat between Mr. Lu and the salesperson provided to reporters showed that the salesperson repeatedly assured that the vehicle sold was not a mortgaged vehicle and did not have any loan. The original car owner is receiving new energy subsidies and can only transfer the ownership after 6 months.

Mr. Lu’s experience is not an isolated case. Ms. Wang from Cangzhou, Hebei also told reporters that she also paid 78,000 yuan in December last year to purchase a 99 new second-hand car from the company.

A few days ago, she saw a notification letter from the sales company from the salesperson. Only then did she learn that she had paid full price for a mortgaged car in someone else’s name.

△On September 20, 2026, Qinhuangdao Zhongdian Automobile Trading Co., Ltd. issued a notification letter to customers

Qinhuangdao Zhongdian Automobile Trading Co., Ltd. issued a notification letter to customers stating that the initial car collection and holding costs were seriously inverted with the current market price, operating losses have expanded, and the current capital chain has been broken. Affected by this, the company has been unable to fulfill its unpaid monthly repayments, final payments, settlement payments and related cooperation obligations under the original contract as scheduled. Monthly payment will be suspended starting from September 21, 2026, and the possibility of subsequent application to the People’s Court for bankruptcy liquidation or reorganization in accordance with the law is not ruled out.

In the recording of the call in which Ms. Wang questioned the salesperson, the salesperson also admitted that she did not explain to Ms. Wang that this was an installment car.

Currently, the car is still under actual control by Ms. Wang, but she is worried that once the loan for the car is cut off, she may face the risk of losing both her money and the car. Mr. Chen, a second-hand car buyer in Harbin, Heilongjiang, paid in full for the second-hand car worth 142,000 yuan on August 1 this year. Without his knowledge, the original car owner was suddenly dragged back to Qinhuangdao from Harbin a few days ago.

陳先生：The original owner had the car towed away on the night of September 22nd. I paid the full amount, and the sales company promised to transfer the ownership in one year. What I was told at the time was that for some special reasons, the original car owners did not buy the car for practicality. They bought the car and sold it directly in order to obtain national new energy subsidies.

On September 23, Mr. Chen reported to the Harbin Public Security Bureau that the vehicle was stolen, and the police station in the jurisdiction issued a receipt of acceptance to him. The reporter contacted Mr. Liu, the original owner of the vehicle involved in Mr. Chen’s case, by phone. The other party said that it was not convenient for him to be interviewed. The reporter also called the public telephone number of Qinhuangdao Zhongdian Automobile Trading Co., Ltd., but was unable to get through.

An industry insider who has been engaged in second-hand car sales and transactions for many years said that under normal circumstances, the purchase and sale of second-hand cars can be transferred directly. The so-called “0-kilometer” second-hand cars are mostly quasi-new cars with shorter mileage. Such vehicles are also commonly traded within the industry.

Insiders:You can just transfer the account directly, so there is this market because of the price difference. It’s 10,000 to 20,000 yuan cheaper than going to a 4S store to buy a new car and paying insurance and purchase tax. There will be people who are greedy for cheap, and this is not uncommon in the industry. The main problem was that when he bought the car, he was not even given the registration certificate. You see, when we buy a car, we normally need a registration certificate and driving license. Under normal circumstances, if the procedures are not complete, you cannot buy or trade.

Xie Shu, a professor at the School of Criminal Justice of China University of Political Science and Law, said that under the guise of “trade-in old for new”, he recruited nominal car owners, fabricated transaction materials to obtain bank loans, and then sold the same batch of mortgaged vehicles to car buyers and collected the full payment. If it is found that he had the subjective purpose of illegal possession, he would be suspected of contract fraud and loan fraud. For car buyers, they should report the case to the public security organs as soon as possible, and simultaneously explain the actual possession of the vehicle to the lending bank, keep the contract, payment vouchers and communication records, and cooperate with the public security organs in case investigation and recovery of stolen goods. The earlier criminal intervention is carried out in such cases, the more conducive it is to clarify the flow of funds and prevent the loss of evidence.

Xue Yongkui, a legal person who was a prosecutor, analyzed that in addition to the car sales company being suspected of criminal crimes, the lender (the nominal car owner) may face dual legal risks, both criminal and civil. Late repayments will also affect your personal credit score.

薛永奎：For the trader of the automobile trading company involved in the case, he has been suspected of loan fraud or contract fraud. If the borrower knows in advance that he is just a “head” and colludes with the trader of the auto trading company to assist in obtaining bank loans, he may be found to be an accomplice in the crime of loan fraud or defrauding loans and must bear corresponding criminal liability.

Legal expert Qiao Feng believes that the vehicles involved in the case are all in the names of others, so the “Vehicle Transfer Agreement” signed between the company involved in the case and the new owner is essentially a vehicle sales agreement. If the loan contract or mortgage contract was filled in by the original car owner after the car was sold, the new car owner can apply to cancel the mortgage or loan contract as a third party.

喬烽：If a second-hand car company asks the original owner to pretend to be a substitute to purchase the vehicle, and then obtains money from the new car buyer to make up for the interest accrued on the previous loan. Covering up an illegal purpose in a legal form is a criminal offence.

The reporter learned from the interview that many victims have reported the crime to the Qinhuangdao Municipal Public Security Bureau Economic Development Zone Branch. A reporter from the main station learned from the relevant departments that the public security agency has opened a case and the case is under investigation.

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