If you purchase a vehicle with a lien on it, you will find yourself in a very precarious situation. A lien is a right that an individual or institution has to your car in consequence of some sort of unpaid debt. Very often, this happens when a car is put up as collateral. In effect, if you are financing your car, then failure to pay the loan means that the bank can legally take it from you. The bank has a lien on the vehicle in such a case. Finding any liens on a vehicle is therefore an essential task when you are on the market for a car, and doing this thoroughly will make the difference between care-free car ownership and a significant headache down the road.
How to find liens on a vehicle’s title
A used vehicle can have a lien on it for a number of reasons. Whether it’s from borrowing money or repairs, the simple fact that a lien exists at all means you could have to pay for what someone else incurred. The former owner’s debt transfers to you, but you can avoid this from the start if you are diligent during the sale.
Step 1: Ask to see the vehicle’s title. The title on a vehicle should denote any outstanding liens on the vehicle, so make sure you can view it prior to the purchase.
Even if you are assured that there are no liens, you should ask to see the title. If the seller is unwilling or hesitant to show you the title, this should be a sign that something is awry. If there is nothing to hide, the seller should be as forthcoming as possible.
Step 2: View any lien releases. If there are any liens listed on the title, be sure to view the notice of lien release.
The notice of lien release shows that whatever charges or fees were associated with that lien have been paid off. Basically, the lien release tells you that these liens are no longer an issue.
Again, if the seller does not have or is unwilling to present a notice of lien release, this should be a sign that there is an issue. And just because the seller gives you verbal assurances that the lien has been taken care of, this of course does not mean it really has been.
If you see that there is a lien on the vehicle, you should assume, for your own sake, that it has not been paid unless you see clear evidence (in the form of a lien release) to the contrary.
How to find liens by VIN
Step 1: Research your Vehicle Identification Number (VIN). Your car’s VIN can be used to find liens by accessing an online database.
The VIN acts as unique way to identify your vehicle, so if there were ever any liens associated with the car, they would appear when you searched the number.
You can do the search yourself in some cases by using your local Department of Motor Vehicle’s website, or you may need to do the search in person or via mail. You can reach out to your local DMV to see what is the easiest way to the search.
Additionally, you can use an online company, such as Carfax, to help you determine whether there are any liens. Again, the best option for you will vary according to your state.
Even if the process becomes burdensome, it is far better for you to go through the ordeal of checking for liens now rather than find out the hard way after you have purchased the vehicle. Taking the necessary steps now will ensure you don’t have a crisis in the future.