What to Do if Someone Puts a Lien on the Car You Own
Key Takeaways
- There are various legal options to handle situations where your vehicle, which you own (paid in full), gets a lien placed on it and you want it resolved ASAP.
- Understand that parties outside of the bank or yourself, the vehicle owner, can place a lien on your vehicle; reasons can include unpaid mechanic repair bills, parking tickets, and so forth.
- A lien is the right to possess property belonging to another person until the borrowed amount is paid back.
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So, you’ve found out there’s a lien on your vehicle and now you’re not sure what to do.
A lien can be put on your vehicle for a number of reasons, but sometimes it is a complete misunderstanding or mistake by the person attempting to collect. If this is the case, there are appropriate ways to respond.
At Auto Money, we’re here to help you understand the specifics of how title liens work and what to do if you have one on your vehicle. Keep reading to learn more!
What Do I Do If My Car I Own Has a Lien that Shouldn’t Be There?
If a lien gets placed on the vehicle you own unexpectedly, here’s how to handle a variety of lien-related situations:
LOCATED THE CAR TITLE
If you’ve had a lien placed on your vehicle and believe it was wrongfully done so, locate your car title. If you are shown as the owner and no lienholder is listed, then you are the full legal owner of your vehicle. This means you can rule out auto lenders, loan companies, or co-signers as the party behind the lien. Be sure to hold onto your title as clear proof of ownership.
LEINHOLDER FAILED TO RELEASE TITLE
If a lienholder is listed on the title and you have not received a letter stating the release of the lien, then you will need to contact them to make necessary arrangements to pay the outstanding balance.
MECHANIC PLACED LIEN ON VEHICLE
A mechanic’s lien may be the result of unpaid repairs or towing fees. You will need to speak directly to the claimant to understand exactly what the lien is for and when the service took place. If service was performed before the vehicle came into your ownership, then they have no claim against you but the previous owner.
FAILED TO PAY TAXES & FEES
If the lien is placed on your vehicle due to unpaid registration fees or vehicle taxes, those will have to be paid even if they were incurred before you became the owner of the vehicle.
ESTATE PLANNING ISSUE
If the lien on your vehicle is due to an unsettled probate case, you may need to appear in probate court to explain how you became the owner of the vehicle. You’ll have to show who sold it to you and how much you paid for the car, then the judge will decide what should be done. The judge may order the car to be returned to the seller or you may be asked to pay additional money, if it is decided that the car was not sold at a fair value.
Different Reasons for a Vehicle Lien
If your vehicle is paid in full and you find out a lien is still on your vehicle, it may be caused by a number of reasons. Here is a list of what may be behind the lien that is still on your car:
MECHANIC PLACED A LIEN ON CAR
The vehicle received repairs or was towed, and the bill was not paid. The mechanic or shop that performed the work can file a “mechanic’s lien” to recover the money owed.
PARKING VIOLATION/TICKETS
If the vehicle has been ticketed or fined for parking violations, the city, county, or state may impose a lien as those fines remain attached to a vehicle’s title.
FAILED TO PAY TAXES/FEES
Unpaid registration fees or vehicle taxes can result in a lien placed on your title.
THE CAR DOESN’T HAVE A CLEAN TITLE
You may have been sold a vehicle that did not have a clear title. The seller may have neglected to tell you this information or buried it in a hefty purchase agreement.
ESTATE PLACED A LIEN ON CAR
Your vehicle may have been part of an estate and was being settled in probate when purchased. Even though the vehicle was sold to you, a judge may order you to pay more if the car was not sold at a fair value or keep the vehicle with the estate until the financials are settled.
SCAMMY ACTIVITY
You may know for a fact that you do not owe any party for your vehicle. This can mean the attempted collection is actually a scam.
Time to Hire an Attorney
Unfortunately, an unexpected lien placed on your vehicle is something you will need to get to the bottom of.
Hiring an attorney can be a smart move, as it’ll help to have someone on your side to assist with any bill or property dispute. The type of attorney needed to handle the matter will depend on your state. Generally speaking, look for an attorney who has a specialty in consumer protection lawyer or general practice lawyer.
Consumer protection lawyers are equipped to handle cases related to consumer fraud, product liability, false advertising, and other scams. Whereas a general practice attorney can handle a variety of cases, including family law, real estate, personal injury claims, and more.
Their broad area of expertise allows them to assist you wherever your needs lie.
ALREADY HAVE A TITLE LOAN OR TITLE PAWN WITH ANOTHER COMPANY, AUTO MONEY CAN STILL HELP YOU!
If you have a title loan or title pawn with another company, Auto Money may pay it off at a lower interest rate!
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FREQUENTLY ASKED QUESTIONS
How to find out if a vehicle has a lien?
When buying a used car from a private seller, always check its lien status. Here’s how you can do so:
- Run a Comprehensive VIN Search: Run a free VIN check using services like iSeeCars. The VIN check provides a comprehensive analysis of the vehicle in question, including lien and title information.
- Get a vehicle history report: Services like CARFAX or Autocheck offer a free look into a vehicle’s lien history.
What do I do if the bank hasn't released a lien on my vehicle that I paid off?
If your lender didn’t send you a lien release, submit a request for the financial institution for proof of loan satisfaction. You can make this request directly through your lender or through the DMV.
What type of attorney should I hire to release a vehicle lien that has already been paid off?
Your state law determines who can handle this matter. In general, search for an attorney who specialists in consumer protection or a general practice attorney.
Will a car lien hurt my credit?
The type of lien on your vehicle determines whether or not your credit is affected.
Statutory and judgment liens can negatively impact your credit score and can affect your obtaining financing in the future. Consensual liens that are repaid do not negatively impact your credit.
How long will my credit score show a vehicle lien on it?
How long a lien will stay on your credit report depends on the type of lien it is. Statutory liens and judgment liens stay on your credit report for seven years, while consensual liens do not impact your credit report.
How do I remove a lien from my credit report?
After you’ve fully repaid your lien, request a letter from your state’s tax agency stating you have repaid the debt.
Often with an auto lender, they will send a lien release to the DMV and then you will receive an updated title in the mail.
What is the difference between a good lien vs a bad lien?
Here are the differences between the different types of liens:
- Consensual liens are considered “good liens” and do not negatively impact your credit. This type of liens includes mortgages, vehicles, and business assets.
- Statutory liens are considered bad and can remain listed on your credit for seven years. This type of liens includes mechanics and tax liens.
- Judgment liens are considered the most severe type of lien and can remain listed on your credit for up to seven years. These types of liens occur when a court grants financial interest in your assets to a creditor.
Can a vehicle lien impact my car insurance?
When you finance a vehicle, your lien holder may require you to obtain auto insurance that protects the creditor in the case that the vehicle is in an accident, is damaged, or stolen.
You may also see your lien holder’s name on your policy. Once you pay off your loan, you can opt out of the additional coverage required by your lien holder.
How can I find out if a car has a lien?
If you’re purchasing your vehicle from a private seller, it’s important to check the lien status. Here’s how you can do so:
- Run a Comprehensive VIN Search: You can use services such as iSeeCars to run a free VIN check. This will provide a comprehensive analysis of the vehicle in question, including title and lien information provided by the DMV.
- Get a vehicle history report: A vehicle report like CARFAX and Autocheck can provide a vehicle’s lien history.
How to put a lien on a car?
To place a lien on a title, you’ll need to follow the process set forth by your state’s DMV.
Most likely, you’ll have to complete a lienholder application and submit it along with the required fee and any required documentation. The process may vary by jurisdiction, so check with your local DMV for specific instructions.
Remember, putting a lien on a title usually involves a legal and financial process, so be sure to contact your state’s authority on the matter to receive the most up-to-date and correct information on the process.
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Simple. Because we care about our customers. We understand that unexpected situations arise that require cash in a hurry – and they don’t always coincide with your payday!
At Auto Money Title Loans, everyday can be a payday! We get you up to $20,000 cash in 3 simple steps.
Money you need fast, so you can pay bills, home repairs, auto repairs or whatever else life throws at you.
Over 80+ locations in the Southeast, you get the most cash for your title and you keep your car. Plus, you’re instantly approved, regardless of your credit! Inquire now!
Sources: Progressive, Bankrate & Carfax.
Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial advice and/or legal advice. We are not financial advisors nor legal professionals , and the content provided does not constitute financial or legal advice from a licensed professional. The content of this article does not replace personalized advice from a licensed professional who is aware of your individual circumstances.
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MORE HELPFUL RESOURCES
Types of Services
How can I put a lien on a vehicle?
How do I get my car title after paying my car off in full?
How to confirm if your car title is lien free in South Carolina?
What will happen if I fail to register my car in South Carolina?
What is title jumping in South Carolina?
ALREADY HAVE A TITLE LOAN WITH ANOTHER COMPANY, AUTO MONEY CAN STILL HELP YOU!
If you have a title loan or title pawn with another company, Auto Money may pay it off at a lower interest rate!
Interested?
Title Loans in South Carolina
A title loan is a quick and easy way to get the cash you need, using your vehicle’s title for collateral instead of your credit score. The amount will be determined by our expert appraisers. Auto Money offers competitive interest rates and gives you the most money for your title with instant approval. And the best part is, you get to keep driving your vehicle!
SC Consumer Loans: Your Rights and Responsibilities
Disclaimer: This is a high interest loan. You should go to another source if you have the ability to borrow at a lower rate of interest. You are placing your vehicle at risk if you default on this loan.
Title Pawns in Georgia
A title pawn is a quick and easy way to get the cash you need, using your vehicle’s title as collateral towards borrowing money. At our Georgia Auto Money stores, you have 30 days to repay the title pawn. If you are unable to pay off the balance within 30 days, Auto Money’s professional and courteous staff is available to discuss repayment options with you.
Title Loans in North Carolina
Disclaimer: At Auto Money, we uphold all federal and state laws related to Title Loans. Title loan transactions are prohibited within the state of North Carolina.
Disclosure: This website is a solicitation for an auto title loan or pawn. This solicitation is not a unilateral contract or a guaranteed offer. All title loans and title pawns and the amount of the title loans or title pawns are subject to Auto Money’s approval that is contingent on several underwriting factors such as a completed loan or pawn application, your employment status, monthly income, and a vehicle evaluation.
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