How Do I Get A Lien Removed From Car Title?

The lien removal process will vary by state, but it typically involves completing appropriate paperwork and paying a fee for the new vehicle title. If you are wondering how to get a lien removed from a car title, follow this guide.

What Is A Car Lien?

If you have been approved for financing to purchase a vehicle, then you need to get familiar with the term “lien.” A lien is essentially a safeguard for the lender of the vehicle. This represents the lender’s legal right to possession of the car until all debt is repaid.

When the buyer of the vehicle fails to make payments, the lienholder then has the right to repossess the vehicle. The lender can also insist that the asset is protected, making full insurance payments the buyer’s sole responsibility. Once the financing is completely paid off, the lien is released.

Purchasing a car from a dealership will offer the easiest lien process possible. Of course, a new vehicle will never come with a lien since you are the first owner. At a used car dealership, though, the dealer will generally take care of all paperwork needed to draw up a lien. Purchases from private sellers will be much different when it comes to liens, so make sure you know the status of any possible liens before finalizing a purchase. If any car still has a lien on it, the seller will need to make some sort of arrangements to pay off any remaining debts before transferring the title.

There are a few ways for the buyer to check on a lien of a particular vehicle. For example, you can simply ask the seller for a copy of the lien release document. Or, you can use state DMV resources that are always available to the general public. Some state online resources will let you run a vehicle check by using the VIN (vehicle identification number) from that specific model. Other resources such as CarFax can also reveal any existing liens.

How To Get A Title For A Car That Has A Lien

Once you have made your final car payment, the lender should either send proof that the lien was discharged (or released). If your state and lender participate in an electronic lien title program, it can be released electronically. Check with your state’s DMV or BMV to find out how to apply for a new car title that’s in your name.

After you’ve followed the state’s process for removing the lien and getting a new title, you will receive both the new title and full ownership rights to the car.

Different Ways To Get A Lien Removed From A Car Title

These are five common ways you can go about getting a lien removed from a vehicle title:

Send a lien release letter to your lender.
Send letter of non-interest to your lender.
Your lender was shut down.
Your lender went out of business.
A court-ordered title.

What Happens When You Can’t Find The Lienholder?

It may be difficult to track down the lienholder in the event your car lender merged with another company, changed names, moved locations, sold the business, or went out of business. Begin this process by contacting your DMV or BMV. They will then likely ask for documentation showing proof that you have paid the lienholder back in full.