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How to Find Out if a Used Car Has a Lien

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You can find a car lien on the car title or by using a vehicle identification number (VIN) to locate lien information or purchase a vehicle history report online.
  • A lienholder is typically a
    car loan
    lender or other institution that has a legal right to your property if you default on payments listed in the related terms of the lien.
  • If you purchase a car with a lien—even unknowingly—you will be on the hook for any outstanding payments to resolve the lien.
  • Verifying that a vehicle is lien-free is one of the most important steps when
    buying a used car from a private seller
    .

How to find out the lienholder on a car

The lienholder of a car can enforce certain rights—including
car repossession
if any terms of the lien are violated. A vehicle lien could be held by any one of the following institutions:
  • A car loan lender: The lender has a claim to the vehicle until the
    car loan is fully paid off
    .
  • A mechanic: Some states will allow mechanics to place a lien on a car if the owner doesn’t pay for work done on the car in an established timeframe.
  • The government: The government can put a lien on your vehicle if you don’t pay your taxes on time.
  • Other lending institutions: A financial institution may have a lien on a car if it's used for collateral in a mortgage or loan.
Some states require lien information to be listed on the vehicle title while other states require separate documentation. Generally, you can locate the lien from three sources: 
  • Through your state transportation agency or Department of Motor Vehicles (DMV)
  • By looking at the car’s certificate of title
  • Through a vehicle history report
MORE: 7 things to look for when buying a used car

Investigate the car title for a lien

Review the used car title to locate any information related to:
  • The current owner
  • Past owners
  • Current or past liens on the car
Expert tip: You should always ask to examine the title information,
vehicle registration
, and the seller’s photo ID or driver’s license when
buying a car in a private sale
—even if you can’t use them to verify lien status. A seller that makes excuses or is hesitant to show the title is a red flag for fraudulent activity.

Locate any relevant lien documents

If the title shows that there has been a lien, you will need to make sure that the lien has been paid off before you sign the title.
What to do: Ask the seller to provide a
lien release
. A lien release is a legal document that proves that the lien has been paid off and the lienholder no longer has any claim to the property.
Sometimes, the lien release will be noted on the car’s title—but some states require a separate lien release document. If the seller has lost their lien release, it is their responsibility to get a new one.
Proceed with caution: Be sure to obtain possession of all lien release documents if you decide to purchase a car with a lien against it. Don’t let a seller talk you into providing lien release documents after a sale or convincing you that there’s been a mistake. 

Check the VIN

You can find a car’s vehicle identification number (VIN) mounted on a small metal plate tucked close to the window on the driver’s side dashboard. You might have to get out of the car and look from the outside to read the numbers.
What to do: Use the 17-digit VIN to ensure that the documentation listed on the title and registration match up perfectly to the car itself. If there is anything off with the VIN, take it as a red flag and walk away from the sale. 

Check the vehicle history report

Checking out a car history report is an easy way to ensure there are no liens against the vehicle. It will also let you know if the car has been in accidents before and if there is any relevant recall information associated with the vehicle.
What to do: You can use car sites like
CARFAX
to pull up vehicle reports before you buy. You’ll have to pay a fee to access a vehicle history report—but it is money well invested.

Use a title checker tool

Some states provide title checker tools on their DMV or transportation department websites.
What to do: If your state provides access, you can use the VIN collected from the car and vehicle documents to verify any information on the title—including whether the car has or has had a lien on it.

Head to your local DMV

If your state doesn’t offer an online lien search, you can visit the DMV in person to request information on the title. Depending on the state, you might have to pay a small fee to access this report.
You will also have to reach out to the DMV if a seller has proof of a lien release but the lien release is not noted on the title. While it is the seller’s job to provide lien release documentation, the buyer is responsible for correcting any errors on the title before assuming ownership.

Buying or selling a car with an active lien: proceed with caution

In states where the lienholder holds the title, the seller will need to get a clear title before
transferring ownership to a buyer
. But you might be able to purchase a car with a lien if you live in a non-title-holding state.
For used car buyers: Do not purchase a car with an active lien unless you have arranged with the seller to release the lien. After all, you won’t own the vehicle until the lien is paid off.
For used car sellers: You can sell a car with a lien on it if you can get the title cleared during the sale transaction. If you need to sell your car to pay off a loan, you can reach out to your lienholder to arrange the following type of transaction:
  • The buyer will make out the cheque for the remaining payoff amount on the lien to the lender
  • The lender will clear the title before transferring it to the buyer
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FAQs

To check a VIN for a lien, simply note the 17-digit VIN denoted on the car and take it to your DMV. Most states allow you to run VINs to see if they're flagged for any abnormalities.
The lienholder is typically the lending institution that helped financed your car and can be found in the details of your financing agreement or on your car title.

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