A purchase-money security interest in consumer goods is created when a person buys the goods on credit.

Question

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A purchase-money security interest (PMSI) is a type of security interest in personal property that arises when a seller or lender provides financing to a buyer for the purchase of goods. In the case of consumer goods, the PMSI is created when the buyer purchases the goods on credit. The seller or lender then has a security interest in the goods as collateral for the debt, which gives them the right to repossess the goods if the buyer defaults on the loan.

A Purchase-Money Security Interest in Consumer Goods Is Created When