Consumer PMSIs are automatically perfected.

Consumer PMSIs are automatically perfected.

• A. True
• B. False
• C. They require filing
• D. They require possession

Answer: (A)

Purchase-money security interests in consumer goods are automatically perfected. Once the PMSI attaches (value given, debtor has rights in the collateral, and there’s a security agreement describing the collateral), no filing or possession is needed to achieve perfection. This helps protect the lender’s interest in typical consumer purchases without extra formal steps. It’s a contrast to PMSIs in other collateral like inventory or accounts, where filing is usually required to perfect. For a consumer purchase, the automatic perfection means the lender has priority without a financing statement.

Purchase-money security interests in consumer goods are automatically perfected. Once the PMSI attaches (value given, debtor has rights in the collateral, and there’s a security agreement describing the collateral), no filing or possession is needed to achieve perfection. This helps protect the lender’s interest in typical consumer purchases without extra formal steps. It’s a contrast to PMSIs in other collateral like inventory or accounts, where filing is usually required to perfect. For a consumer purchase, the automatic perfection means the lender has priority without a financing statement.