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Why is there a lien on my car?
I just bought my first car a few months ago and I financed it through the dealership. I was looking at my paperwork and kept seeing mentions of a lien on my car. I’m a little worried as I thought that liens were bad things! I’ve made all my payments on time—why is there a lien on my car?
Amber Reed · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
First, don’t panic! Second, congratulations on the purchase of your first car!
There’s a
lien on your car
to give the lender the legal right to repossess it if you default on a car loan
. The lien remains in place until the car is paid off, at which time the lender releases the lien and you own the car free and clear. But until then, the lien gives your lender (in this case, the dealership) a legal claim to the car until the loan is repaid. This is standard practice with a
car loan
and doesn’t mean anything bad—unless you stop making your car payments, that is. To make your loan payments easier, there are a few things you can do. First, check that your
car insurance
policy is updated with the right coverage limits. If you have additional coverage you don’t have use for, cancel them to save some additional cash. Next, be a safe driver! Avoid abrupt accelerating and braking, as well as idling, to save on gas expenses. Combine these tips and your loan will be paid off in no time!View full answer
- Gregory R.
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Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.
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