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How to get a lien lifted from a used car Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our aim is to assist you make better financial decisions by offering interactive financial calculators and tools, publishing original and objective content. We also allow you to conduct research and compare information for free to help you make financial decisions with confidence. Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Earn Money The deals that are displayed on this website are provided by companies that compensate us. This compensation can affect the way and where products appear on this site, including for instance, the order in which they may be listed within the categories of listing and other categories, unless prohibited by law. This applies to our mortgage and home equity products, as well as other products for home loans. However, this compensation will not influence the content we publish or the reviews that appear on this website. We do not include the entire universe of businesses or financial offerings that could be available to you.
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3 minutes read. Published January 19, 2023
Writen by Rebecca Betterton Written by Auto Loans Reporter
Rebecca Betterton is the auto loans reporter for Bankrate. She is a specialist in helping readers in navigating the details of taking out loans to buy an automobile.
Editor: Rhys Subitch Edited by Auto loans editor
Rhys has been editing and writing for Bankrate since late 2021. They are passionate about helping readers gain confidence to control their finances with concise, well-studied and well-organized facts that break down complex topics into manageable bites.
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An lien can be described as, at its simplest, an insurance policy that a lender uses to protect its own interests in the event that a borrower fails to pay on a financed vehicle. The lien represents the lender’s legal right to the vehicle, and it remains in place until the loan has been paid in full. If you have recently taken out a title, follow these steps to put yourself in a better financial position. What exactly is a car lien? While the thought of a lien on your car may feel daunting but it’s not unheard of. Vehicles that are funded by a loan are typically put in a lien till the loan is paid in full. This «insurance policy» put in place by the lender allows it to have the legal right to retain title to the vehicle until remaining balance that is owed on the loan is paid off. A majority of motorists do not know how a lien operates until they attempt to do so and realize that they are not capable of. If a lien is that is on a vehicle it is possible for creditors or lenders to if the loan hasn’t been paid back or is in default. Additionally, it affects the potential to sell the vehicle the lien can also affect the cost of . How can you tell if your car is in the midst of a lien When buying a second-hand car it is always recommended to request that the seller provides you with a letter from the lender stating that the lien has been released. If the seller is providing the title, check with your nearby Department of Motor Vehicles first to make sure there’s no lien. In some cases you might be able to access the DMV website to search online for a lien using the 17-digit (VIN). The VIN number can be found in various places such as the lower left of the car’s windshield. If you are issued a title to the used car there is a good chance that the lien was fully paid — it’s just not released in a proper manner. This can happen because of a bank error or get lost in the shuffle of a merger or . Look out for it when you work with the buyer. Where can you find information about lien Information on lien status can be tracked down in several ways such as: Department of Motor Vehicles: Using the vehicle identification number, you can determine the status of a lien on a vehicle at the Department of Motor Vehicles. In many places you can conduct a lien search online by using the DMV website. You might also be able to contact or visit your nearest DMV to get lien information. Reports on the history of your vehicle: Numerous online websites offer vehicle history reports for a nominal fee. These websites, like VIN Smart and AutoCheck, offer full reports on the history of your vehicle along with the information about lien. How do you get a lien removed from a car title Buying a used car shouldn’t come with any strings attached — particularly not the lien. Even though it could take some legwork, and quite possibly several weeks, you should be able to solve your problem for a minimal or no cost. Contact the seller before purchasing a used car through the dealer, make sure to inquire with the salesperson whether there’s a lien on the vehicle. In these cases the dealership usually handles getting rid of the lien. If you’re financing your purchase through a loan then your lender becomes the . If so, you should request for proof that the car loan was fully paid, such as cancelled checks or a fully paid letter. It is the responsibility of the seller to repay the loan so that they can transfer the title of the car. You can include that requirement in your purchase contract. It’s also a good idea to reach out to the lender directly yourself and check the status of the lien. You can even do it before finalizing the purchase. Ask about the total amount due to release the car as and other conditions that might affect the sale. Request a lien cancellation if the lender is a bank that has failed (or is a subsidiary of one) You can reach The Federal Deposit Insurance Corp. directly to request a release notice. The FDIC will assist you in obtaining an order for a lien when you have verified that the failed bank was placed in FDIC receivership. The offers a search function which allows users to search the database of these banks. The FDIC also keeps separate lists of failed banks , including specifics about what happened to the banks that were acquired by a different financial institution. Once you have the documentation you require, you are able to file it with DMV and DMV and . The bottom line Simply put, it’s hard to take pleasure in your new car in the event that there’s an obligation on it. Be sure that the previous owner has paid off any money owed so that the car is fully yours — not the bank’s.
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Writen by Auto Loans Reporter
Rebecca Betterton is the auto loans reporter for Bankrate. She is a specialist in helping readers with the ways and pitfalls of taking out loans to purchase an automobile.
Editor: Rhys Subitch Edited by Auto loans editor
Rhys has been editing and writing for Bankrate since late 2021. They are committed to helping readers gain confidence to control their finances by providing clear, well-researched information that break down complex subjects into bite-sized pieces.
Auto loans editor
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