How Do Mechanic Lien’s Work And Are They Trustworthy?

Why Mechanics Liens Are Not the Best Way to Get a Title
So you’ve heard me talk many times about mechanics liens and why they are not the way to go about getting a title. Many times, an automotive shop or even a private citizen thinks, “I’ll just slap a mechanic on this car and get a title for it.” It doesn’t work. It’s the worst way to get a title. In the past, years ago, it was a viable opportunity, but nowadays, you definitely don’t want to use a mechanics lien as a way to get a title. This article tells you exactly why. Here’s an article from The Daily Dot.

A Mechanic’s Ordeal With a Lien
Interviewing a mechanic who works on cars for a living, somebody brought in a car, dropped it off for work, and never picked it up. His ordeal in even trying to get a title was so long-winded and so torturous that he swore he’d never do it again. Here’s why. For many years, an automotive mechanics lien was a viable way for a legitimate automotive repair shop to get paid for their vehicle. Then, about seven or eight years ago, in 2015 or 2016, many automotive shops started to abuse the process. They used it as a way to get a title for their buddy who lost a title they bought on Craigslist.

Abuse of Mechanics Liens
They put ads in the newspaper that said, “Hey, if you need to get a title for a car, bring it to us, and we’ll put through a fake mechanics lien.” Some shops were using it to get titles for cars that they really didn’t work on that much. The privilege given to automotive shops started to become curtailed. Some states stopped it altogether. There was a period of time in Indiana where they stopped and put a hold on all mechanics liens for about 14 months.

Stricter Requirements for Mechanics Liens
Now, even in states that allow them, they do what’s called a level three audit on every case that comes through their file. They make sure that the owner signed a repair order authorizing work. They ensure the car was actually auctioned off to the public, not just given to somebody directly. They make sure all the proper procedures are followed. All the right notifications are followed, meaning certified letters must be sent to the lienholder, the owner, and any interested parties multiple times over the course of two or three months.

The Complexities of the Process
You have to send out a certified letter, wait 45 days, send another one, wait 30 days, and put an ad in the newspaper announcing that you’re going to auction off the car to the highest bidder. That way, people will come bid on the car—you just can’t give it to one person. It’s a very complicated process. For the most part, even if you are a legitimate automotive shop and you did work on the vehicle, the easier way to get a title is just to go to a court order title.

The Rise of Alternative Methods
It’s faster and cheaper, and you don’t have to jump through as many hoops. Because mechanics liens were used improperly for so long, all the states’ DMV commissioners have cracked down on them. In fact, the Commissioners have a biannual meeting where they discuss this issue. For many years, they’ve said that half of mechanics liens are fraud, and the other half are scams.

Oversight on Shops Using Mechanics Liens
They now audit the ones that come through and review records for that shop to see how much they have paid in payroll taxes, sales taxes, and permit fees. This gives them an idea of how big the shop is. For example, if Joe’s Automotive reports $38,000 in sales taxes last month, but they are putting through 10 mechanics liens, that raises a red flag.

A Real-Life Case Study
In this article, a shop owner faced a difficult process. A customer brought in a car, approved a repair quote, and the shop installed a new transmission. Afterward, the customer never came back. The shop had to go through a mechanics lien, which turned into a brutal process taking seven or eight months, costing thousands of dollars. It was rejected twice because it was audited and found to have minor errors.

The Verdict on Mechanics Liens
This article, shared by The Daily Dot, includes quotes from CarTitles.com stating that while mechanics liens are a legal process allowing a shop to recover costs, they are complex to execute and should only be used when absolutely necessary. States require cars to be sold at auction, and in some cases, shops can only keep the money owed for repairs, with anything over that amount going to the state.

Consider Alternative Options
Think twice if you’re considering a mechanics lien. It’s certainly not a go-to method if you’re not a licensed mechanic or trying to get a mechanic to do it for you on a car that wasn’t in their shop. Even if you are a mechanic, there are better, faster, and more cost-effective methods available today.

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