Did you recently buy a car? It’s really a blessing if you own a vehicle. However, if there is lien on your car, then most of the time in a day, this thought would certainly cross your mind. Not only this but it would also affect your auto insurance coverage. Therefore, if you need to completely own the rights and ownerships of your car you need to have to pay off that loan. Owning a car meaning; keeping in check all the aspects of your four wheeled ride.
Whether you are learning how many axles there are in a car or even if it’s about searching for a best-looking car to drive. Now, let’s us get behind the wheels and look more closely at how this lien actually works. Moreover, how it impacts upon the ability to sell and buy a car. Here’s to understanding the financial institutions with respect to your car!
What is Lien on a Car?
It’s easy to just buy a vehicle and start driving it. However, their maintenance to registration you can never overlook the most technical side of your vehicle’s custody. Just like in the middle of the road, your car battery runs out and you have to take out the jumper cables to jumpstart your car.
Just like your needs, and responsibilities, your automobile too has its necessary requirements you need to fulfil. Now, do you want to know what exactly puts you’re car on a lien? So, it works this way; when a lien is placed on a vehicle, the lien holder, typically your auto loan lender, becomes legally entitled to the car until the loan balance is settled. If your vehicle has a lien, you must pay off your loan before selling it because the title cannot be changed until the debt is satisfied.
Verify the lien status before purchasing from a private seller to ensure the seller can transfer ownership. If you wish to sell your car, a lien may impact the sales procedure and the necessary insurance coverage. Let’s take a look at who actually holds the title of lien on your car.
Who Holds the Lien on a Car?
Now, who exactly hold the lien on a car?
Holder of Lien on a Car
- Typically, the lien on your vehicle is held by the auto loan company.
- Depending on state laws, they might also be the owners of the vehicle title.
State Registration
- Lien holders submit their lien claims to the DMV or the state’s transportation department.
- The lien holder updates the title by sending a lien release form after the auto loan is paid off.
Rights of Lien Holders
- Can take your automobile back if you don’t repay your loan.
- Impose restrictions on specific car insurance coverage options, usually collision and comprehensive, until the car loan is repaid.
Mechanic’s Lien
- In certain places, auto technicians who complete work and aren’t paid on time may file a lien against the vehicle.
Buying or Selling a Car with Lien
- Ensure the used car vendor individuals transfer the title to you once they pay off their auto loan.
- Pay off the loan to obtain the title for transfer if you plan to sell a car.
- You own the vehicle title in non-title-holding states, but the lien holder’s information can still show up.
- If you are unable to pay off the car without selling it, contact your lien holder. The buyer can pay the lien holder directly to receive the title.
Finding Lien Information
Verify the lien status of a used car before purchasing it from a private seller;
1. State Transportation Agency
To conduct online lien searches on your state’s DMV website, use the Vehicle Identification Number (VIN), which can be found on the vehicle or its paperwork.
2. Car Title
Check the vehicle title for the lien holder’s information.
3. Vehicle History Reported
To check for liens and other important information, get a report from services like Autocheck, Carfax, or the National Motor Vehicle Title Information System.
Final Thoughts
As we come to an end, for buyers and sellers of cars, answering the question, what is a lien on a car? is essential. A lien placed on a vehicle indicates that the lender has a right of possession until the entire amount owed is settled. A clear car title transferred is ensured by knowing, who holds the lien on a car? Examining the vehicle history report and record and verifying the vehicle identifying number (VIN) is necessary to obtain lien information. The lienholder may repossess your car in case of default on your loan. When you pay off your debt, you become the new owner.
In conclusion, knowing the lien status is essential when working with financial institutions, private sellers, or vehicle loan in full and credit scores. Always confirm the lien status to prevent issues when you need a personal loan or sell your automobile. Own your car with confidence!
