# Security interest & the PPSR — what tradies need to know > A security interest lets a lender claim your financed asset if you default. In NZ it's registered on the PPSR. Here's what that means when you buy or sell work gear. Source: https://tradiefinance.co.nz/glossary/security-interest-ppsr Published: 2026-05-08T08:00:00.000Z Category: asset-finance Tags: glossary, ppsr, security-interest, chattel-mortgage --- ## What a security interest is When a lender finances your work ute, trailer or machine, they take a **security interest** in it. In plain terms: if you stop paying, they have a legal right to repossess and sell the asset to recover what they're owed. The asset is the security for the loan. This applies whether the structure is a [chattel mortgage](/glossary/chattel-mortgage) (you own the asset, lender registers a mortgage over it) or a [hire purchase](/glossary/hire-purchase) (lender owns it until the final payment). ## The PPSR In New Zealand, security interests over personal property — vehicles, plant, equipment, inventory — are recorded on the **Personal Property Securities Register (PPSR)**, run by the Companies Office under the Personal Property Securities Act 1999. Registering a security interest (called perfecting it) does two things: - **Establishes priority.** If more than one party has a claim over the same asset, the PPSR generally decides who ranks first. A perfected interest beats an unperfected one. - **Gives public notice.** Anyone can search the register against a vehicle or a debtor to see what's already secured. ## Why it matters when you *buy* gear This is the part that catches tradies out. If you buy a second-hand ute, trailer or piece of plant privately, **a finance company's security interest can follow the asset**. If the seller still owed money on it and didn't clear the debt, the lender can in some cases repossess it from you — even though you paid the seller in good faith. Before you hand over cash for a used vehicle or machine, do a PPSR search (a few dollars, instant, online). If there's a registered security interest, make settlement conditional on it being discharged, or pay the financier directly. This is the single cheapest piece of protection in second-hand asset buying. ## Why it matters when you *sell* If you're selling a financed asset, the security interest needs to be cleared as part of the sale — usually the buyer's (or your) payment pays out the loan and the lender discharges the PPSR registration. A clean discharge is what lets the buyer take the asset free and clear. ## See also - [Chattel mortgage](/glossary/chattel-mortgage) - [Hire purchase](/glossary/hire-purchase)