When a car is sold on credit, what legal status does the creditor generally have with reference to the automobile?
A)The creditor retains legal title and thus holds a security interest in the vehicle, until it is paid for in full.
B)The creditor is secondarily responsible to third parties injured by the driver of the vehicle.
C)The creditor is obliged to carry collision and comprehensive automobile insurance on the vehicle to protect the security interest.
D)all of the above

Question

When a car is sold on credit, what legal status does the creditor generally have with reference to the automobile? ​
A)The creditor retains legal title and thus holds a security interest in the vehicle, until it is paid for in full.
B)The creditor is secondarily responsible to third parties injured by the driver of the vehicle.
C)The creditor is obliged to carry collision and comprehensive automobile insurance on the vehicle to protect the security interest.
D)all of the above

Quizplus · Accepted Answer

The creditor retains legal title to the vehicle and holds a security interest in it until the debt is fully paid. This means the creditor has a legal claim on the vehicle as collateral for the loan, ensuring the borrower's obligation to repay the debt. Options B and C are not generally true regarding the legal status of the creditor in a car sale on credit.

When a Car Is Sold on Credit, What Legal Status