Mark purchased a very expensive automobile on credit. Within a week, Mark discovered that a tune-up was necessary, for he was in the habit of driving at an excessive rate of speed. When the car was repaired, the bill was more than $1,000. Mark does not
have the money to pay for the car repairs or the monthly car payments. The credit company as well as the repair shop are concerned over who has priority of repayment. Who has priority and why?
Titles to automobiles are represented by a title certificate. To obtain a perfected status in regards to the automobile, applicable state law would be controlling. Usually, a notation of the security interest is made on the title itself, and this creates a perfected status.
Even if the credit company had perfected its security interest, in most states this perfected status does not have priority over repair or storage liens against property. The repair shop is first in line to receive payment.
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