McMurray, Presiding Judge.
The State of Georgia (plaintiff) filed this petition for civil forfei[829]*829ture pursuant to OCGA § 16-13-49 to condemn a certain 1988 Ford Mustang automobile seized during a drug raid by the City of Carroll-ton Police Department on January 13, 1993. Jimmy Banks (defendant) appeared and demanded possession, asserting he was the “true owner” of the vehicle. At a non-jury hearing, the following material facts were adduced: The vehicle was registered in Georgia under the name of William Jay Lunsford, who allegedly used it to facilitate the transportation of 12.7 ounces of marijuana discovered in the trunk. However, defendant claimed he had purchased the car from Lunsford on August 18, 1992, and had merely loaned the vehicle to Lunsford at the time it was seized. Defendant had “closed out two savings accounts and [received] a cashier’s check [jointly made] out to Ford Motor Credit and [himself, which he] and William Lumsford [sic]” used to extinguish the creditor’s lien of Ford Motor Credit. Defendant produced a copy of the title certificate showing that on August 18, 1992, Ford Motor Credit released its lien and that on August 20, 1992, William J. “Lumsford” transferred title over to defendant. He also produced a copy of an August 18, 1992, First Union Bank cashier’s check, made out jointly to “Jimmy D. Banks and Ford Motor Credit” in the amount of $7,714.91. Defendant admitted he never registered the car in his name, explaining that after closing his savings accounts to come up with the entire balance owing of $7,714.91, he “didn’t have the money to pay the [ad valorem] taxes,” assessed in the amount of $280. Defendant denied having any knowledge of Lunsford’s alleged use of the vehicle to transport contraband. Lunsford agreed that he sold the car to defendant in August 1992 when defendant paid off Ford Motor Credit.
The trial court determined that defendant was the true owner because “he purchased the car from Lunsford on August 18, 1992.” The court further concluded, “[t]he fact that Mr. Banks has not yet registered the car in his name will not defeat his claim to ownership,” and ordered the vehicle released to defendant. This appeal followed. Held:
1. In its first enumeration, the State contends the trial court “erred by incorrectly defining ‘owner’ and by ignoring the strict requirements to show ownership set forth in O.C.G.A. Sec. 16-13-49 (a) (7).” The State argues that in order “[t]o be considered the legal owner of the seized vehicle, [defendant] was required to comply with the registration and licensing requirements” of OCGA §§ 40-2-20 and 40-2-42, respectively, relying on OCGA § 40-3-32 (d).
OCGA § 16-13-49 (a) (7) provides that the term “ ‘Owner’ means a person, other than an interest holder[, defined at OCGA § 16-13-49 (a) (6) as a secured party], who has an interest in property and is in compliance with any statute requiring its recordation or reflection in public records in order to perfect the interest against a bona fide [830]*830purchaser for value.” (Emphasis supplied.) However, the emphasized language does not apply unless and until the interests of a lien creditor or a bona fide purchaser for value are actually at stake. “The [S]tate in a forfeiture proceeding is not in the position of [a bona fide purchaser for value,] a creditor or lienholder, but its interest is only to prevent a guilty party from further misusing the property. Hallman v. State [of Ga.], 141 Ga. App. 527 (2) (233 SE2d 839) (1977).” State of Ga. v. Sewell, 155 Ga. App. 734 (2), 735 (272 SE2d 514). See also Farmers &c. Bank of Trenton, Fla. v. State, 167 Ga. App. 77, 79 (2) (306 SE2d 11). In the case sub judice, defendant Jimmy Banks acquired the complete ownership interest (clear title and possession), pursuant to his contract, when he paid $7,714.91 to discharge the purchase money security interest of Ford Motor Credit. The fact that it is the substantive law of contract (and not the Motor Vehicle Certificate of Title Act) which creates and defines property interests in motor vehicles is recognized by the express language of OCGA § 40-3-32 (d), which provides in pertinent part: “Except as .. . between the parties, a transfer [of an interest in a motor vehicle] by an owner is not effective until this Code section and Code Section 40-3-33 have been complied with; and no purchaser or transferee shall acquire any right, title, or interest in and to a vehicle purchased by him unless and until he shall obtain from the transferor the certificate of title thereto, duly transferred in accordance with this Code section.” (Emphasis supplied.) See also OCGA § 40-3-32 (b), which imposes upon the transferee the duty to apply for a new title certificate “promptly after delivery to him of the vehicle and certificate of title.” The express statutory exception must mean that, as between the parties, a transfer of an interest in a motor vehicle is effective despite the fact that registration requirements have not yet been complied with. Consequently, Jimmy Banks, as a party to the sale in the case sub judice, acquired his property interest by his contract. The remaining language of OCGA § 40-3-32 (d), i.e., that a transferee acquires no “right, title, or interest . . .” establishes a priority in favor of lienholders of record as against buyers who fail to obtain the certificate of title, properly transferred of record. It is our view that, the State and the dissent err in confusing the creation and existence of a property interest with the priority of that interest in a contest with recorded security interests or with bona fide purchasers for value who take without notice of that interest.
The State correctly observes that under OCGA § 40-2-20 (c), it is a misdemeanor offense to fail to register a car within 21 days of purchase.1 It is also a misdemeanor to fail to obtain authorization to [831]*831transfer the use of a license plate and revalidation decal as required by OCGA § 40-2-42 (a). However, the State is incorrect to argue that the failure of a purchaser to register the vehicle means he has no recognized property interest which can be asserted vis-a-vis the State’s forfeiture claim under OCGA § 16-13-49.2 The Motor Vehicle Certificate of Title Act, OCGA § 40-3-1 et seq. “is a recording statute[.
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McMurray, Presiding Judge.
The State of Georgia (plaintiff) filed this petition for civil forfei[829]*829ture pursuant to OCGA § 16-13-49 to condemn a certain 1988 Ford Mustang automobile seized during a drug raid by the City of Carroll-ton Police Department on January 13, 1993. Jimmy Banks (defendant) appeared and demanded possession, asserting he was the “true owner” of the vehicle. At a non-jury hearing, the following material facts were adduced: The vehicle was registered in Georgia under the name of William Jay Lunsford, who allegedly used it to facilitate the transportation of 12.7 ounces of marijuana discovered in the trunk. However, defendant claimed he had purchased the car from Lunsford on August 18, 1992, and had merely loaned the vehicle to Lunsford at the time it was seized. Defendant had “closed out two savings accounts and [received] a cashier’s check [jointly made] out to Ford Motor Credit and [himself, which he] and William Lumsford [sic]” used to extinguish the creditor’s lien of Ford Motor Credit. Defendant produced a copy of the title certificate showing that on August 18, 1992, Ford Motor Credit released its lien and that on August 20, 1992, William J. “Lumsford” transferred title over to defendant. He also produced a copy of an August 18, 1992, First Union Bank cashier’s check, made out jointly to “Jimmy D. Banks and Ford Motor Credit” in the amount of $7,714.91. Defendant admitted he never registered the car in his name, explaining that after closing his savings accounts to come up with the entire balance owing of $7,714.91, he “didn’t have the money to pay the [ad valorem] taxes,” assessed in the amount of $280. Defendant denied having any knowledge of Lunsford’s alleged use of the vehicle to transport contraband. Lunsford agreed that he sold the car to defendant in August 1992 when defendant paid off Ford Motor Credit.
The trial court determined that defendant was the true owner because “he purchased the car from Lunsford on August 18, 1992.” The court further concluded, “[t]he fact that Mr. Banks has not yet registered the car in his name will not defeat his claim to ownership,” and ordered the vehicle released to defendant. This appeal followed. Held:
1. In its first enumeration, the State contends the trial court “erred by incorrectly defining ‘owner’ and by ignoring the strict requirements to show ownership set forth in O.C.G.A. Sec. 16-13-49 (a) (7).” The State argues that in order “[t]o be considered the legal owner of the seized vehicle, [defendant] was required to comply with the registration and licensing requirements” of OCGA §§ 40-2-20 and 40-2-42, respectively, relying on OCGA § 40-3-32 (d).
OCGA § 16-13-49 (a) (7) provides that the term “ ‘Owner’ means a person, other than an interest holder[, defined at OCGA § 16-13-49 (a) (6) as a secured party], who has an interest in property and is in compliance with any statute requiring its recordation or reflection in public records in order to perfect the interest against a bona fide [830]*830purchaser for value.” (Emphasis supplied.) However, the emphasized language does not apply unless and until the interests of a lien creditor or a bona fide purchaser for value are actually at stake. “The [S]tate in a forfeiture proceeding is not in the position of [a bona fide purchaser for value,] a creditor or lienholder, but its interest is only to prevent a guilty party from further misusing the property. Hallman v. State [of Ga.], 141 Ga. App. 527 (2) (233 SE2d 839) (1977).” State of Ga. v. Sewell, 155 Ga. App. 734 (2), 735 (272 SE2d 514). See also Farmers &c. Bank of Trenton, Fla. v. State, 167 Ga. App. 77, 79 (2) (306 SE2d 11). In the case sub judice, defendant Jimmy Banks acquired the complete ownership interest (clear title and possession), pursuant to his contract, when he paid $7,714.91 to discharge the purchase money security interest of Ford Motor Credit. The fact that it is the substantive law of contract (and not the Motor Vehicle Certificate of Title Act) which creates and defines property interests in motor vehicles is recognized by the express language of OCGA § 40-3-32 (d), which provides in pertinent part: “Except as .. . between the parties, a transfer [of an interest in a motor vehicle] by an owner is not effective until this Code section and Code Section 40-3-33 have been complied with; and no purchaser or transferee shall acquire any right, title, or interest in and to a vehicle purchased by him unless and until he shall obtain from the transferor the certificate of title thereto, duly transferred in accordance with this Code section.” (Emphasis supplied.) See also OCGA § 40-3-32 (b), which imposes upon the transferee the duty to apply for a new title certificate “promptly after delivery to him of the vehicle and certificate of title.” The express statutory exception must mean that, as between the parties, a transfer of an interest in a motor vehicle is effective despite the fact that registration requirements have not yet been complied with. Consequently, Jimmy Banks, as a party to the sale in the case sub judice, acquired his property interest by his contract. The remaining language of OCGA § 40-3-32 (d), i.e., that a transferee acquires no “right, title, or interest . . .” establishes a priority in favor of lienholders of record as against buyers who fail to obtain the certificate of title, properly transferred of record. It is our view that, the State and the dissent err in confusing the creation and existence of a property interest with the priority of that interest in a contest with recorded security interests or with bona fide purchasers for value who take without notice of that interest.
The State correctly observes that under OCGA § 40-2-20 (c), it is a misdemeanor offense to fail to register a car within 21 days of purchase.1 It is also a misdemeanor to fail to obtain authorization to [831]*831transfer the use of a license plate and revalidation decal as required by OCGA § 40-2-42 (a). However, the State is incorrect to argue that the failure of a purchaser to register the vehicle means he has no recognized property interest which can be asserted vis-a-vis the State’s forfeiture claim under OCGA § 16-13-49.2 The Motor Vehicle Certificate of Title Act, OCGA § 40-3-1 et seq. “is a recording statute[. Its] purpose is to perfect and give notice of security interests, and ... ‘this does not affect the creation of [a property or] security interest, which remains a matter of contract between the parties.’ It follows that a [buyer’s] failure to comply with the [registration requirements of the] Act does not nullify the contract but merely has the effect of loss of priority where the rights of third parties who complied with the Act have intervened.” (Emphasis in original.) Hallman v. State of Ga., 141 Ga. App. 527 (1), 528, supra. In the case sub judice, there are no intervening equities of creditors, lienholders, or good faith purchasers for value without notice. Consequently, “ ‘[t]he registration of the instrument under which [defendant] claims is not material on the question of forfeiture.’ Habit v. Stephenson, 217 NC 447 (8 SE2d 245).” Hallman v. State of Ga., 141 Ga. App. 527, 528 (2), supra. “The claimant who has failed to [register] his [interest] . . . may have hard sledding when it comes to convincing the trior of fact, but he is not as a matter of law foreclosed from pursuing his claim.” Hallman v. State of Ga., 141 Ga. App. 527, 528 (2), 529, supra.
In the case sub judice, defendant’s ownership interest, as against the State, was complete in August 1992 when Lunsford voluntarily transferred possession of the vehicle for valuable consideration and defendant “obtain [ed] from the transferor the certificate of title thereto, duly transferred. . . .” OCGA § 40-3-32 (d). The trial court correctly determined that defendant was the “owner” of the vehicle he purchased, within the meaning of OCGA § 16-13-49 (a) (7), even though he failed to register it so as to authorize its use and operation on the public highways.
2. In its second enumeration, the State contends the evidence was [832]*832insufficient to prove defendant was the owner of the vehicle, arguing that “the evidence presented by [defendant] to support his position was not credible.”
“In a condemnation action the state must first carry its burden of proof by a preponderance of the evidence to establish a prima facie case for forfeiture of the property. Bloodworth v. State [of Ga.], 185 Ga. App. 880 (336 SE2d 324) (1988). A [claimant] invoking the innocent owner exception has a two-fold burden. See OCGA § 16-13-50 (a). First, in order to establish standing to contest the forfeiture the [claimant] has the burden of proving the nature and extent of his interest in the property. See Hill [v. State of Ga., 178 Ga. App. 563, 565 (2) (343 SE2d 776)]; Chester [v. State of Ga., 168 Ga. App. 618, 619 (1) (309 SE2d 897)]. Second, the [claimant] must prove by a preponderance of the evidence that he is entitled to the exception As defined by the statute. Morgan [v. State of Ga.], 172 Ga. App. 375, 376 (323 SE2d 620) (1984); OCGA § 16-13-49 (a) (4) (B) and (e).” State of Ga. v. Jackson, 197 Ga. App. 619, 620 (1), 623 (399 SE2d 88). Subsections (o) (5) and (p) (6) of OCGA § 16-13-49 provide that forfeiture proceedings shall be held by the court without a jury. See also Swails v. State of Ga., 263 Ga. 276 (1) (431 SE2d 101). Upon appellate review, factual findings made after a bench trial “shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge the credibility of the witnesses.” OCGA § 9-11-52 (a). Defendant’s testimony in the case sub judice was corroborated by the certificate of title and other documentary evidence indicating that Ford Motor Credit released its purchase money lien in exchange for defendant’s cashier’s check. This is evidence that the sale was a transaction of economic substance, not merely a “sham” as contended by the State, and is consequently sufficient to support the determination that defendant is the owner of the vehicle by virtue of his good faith purchase. See State of Ga. v. Sewell, 155 Ga. App. 734 (2), 736, supra. The State does not contest the sufficiency of the evidence with respect to any other element of the innocent owner exemption from forfeiture established at OCGA § 16-13-49 (e). Consequently, the judgment of the trial court returning the seized vehicle to its owner is affirmed.
Judgment affirmed.
Birdsong, P. J., Beasley, P. J., Johnson, Blackburn and Ruffin, JJ., concur. Pope, C. J., Andrews and Smith, JJ., dissent.