What Is A Lien On A Car?

What Is A Lien On A Car?

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.

If you are searching online for “what is a lien on a car,” then this post should help!

Buying A Car With A Lien

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.

Selling A Car With A Lien

There are several options for selling a car with a lien on it. Perhaps you should plan ahead and begin paying off the balance as early as possible. Paying more regularly or as one lump sum payment are always options. You may save a lot in interest by paying off the financing quickly. Once the lien is released, then you are free to transfer the vehicle to a new buyer.

A trade in at the dealership is another way to deal with letting go of a car with a lien. Oftentimes, the seller will trade in the vehicle and sort out any remaining lien arrangements at the same time. Make sure the trade-in price will cover your full payoff amount, though. If it doesn’t cover the full amount, then a dealer may roll the outstanding balance into your new car’s financing plan.

Selling a car privately means all paperwork will be your sole responsibility. After paying off the vehicle and receiving the updated title, you will have to sign the title release and take care of the transfer. Some states may require your signature to be notarized when selling the car. Make sure to check out all of your state’s rules and regulations before selling privately.

Dar Liens Offers Lien Processing and Filing in Arizona

Dar Liens Offers Processing and Filing of the following types of Liens: Pre-Liens, Notices to OwnerMedical Liens, Construction Liens, Mechanics Liens, HOA Liens, 20 Day Preliminary Lien Notices, and more.

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