If you’ve purchased a car using a loan, you have a lien on your title. Even though lien titles are very common, many people still have questions that aren’t answered by their lienholders. It can be difficult to get answers directly from lienholders, so we’ve compiled answers to the top 5 car title lien frequently asked questions for you.
The easiest way to tell if there is a lien on a car title is to inspect the physical certificate of title. Listed on the front of the title next to or above the owner’s name will be the lienholder if the car has a lien. If there is no lienholder listed, there shouldn’t be an active lien on the car title. To double-check, obtain the VIN prior to purchasing and run a vehicle history check through an NMVTIS-approved provider. While these providers cannot reveal the lienholder or owner information, they can provide information on active title liens and state title history.
Technically, you can’t. When you have a lien on the vehicle, the lienholder is the true owner because they technically paid for the vehicle, you’re just paying them back. Even though you’re driving it and your name is also on the paperwork, selling a car with a lien title is like selling someone else’s car. Before selling a car with a lien on the title, if the loan has been satisfied, you must get a vehicle lien release from your lender. If the loan hasn’t been satisfied and you still owe money, you must pay off the loan and obtain a vehicle lien release to clear the title before selling it. If you’re looking to sell your vehicle with a lien title, make sure to discuss this with your lender first to ensure all paperwork and transfer processes are done correctly.
The loan is the amount of money you borrowed from your lender to purchase the vehicle, the lien is the security interest your lender places on the title while the loan is active. If you default on the loan, the lien gives the lender the authority to collect the vehicle if needed.
Yes, the bank can revoke your loan after you purchase the car and sign the paperwork. When purchasing a car, many dealers will have you sign a bailment agreement meaning that the loan looks like it will be approved, but it’s not totally finished processing with the bank yet. If in some set of circumstances the bank doesn’t accept your loan application, you have to bring the car back.
Why would the bank not accept your loan? There are a handful of reasons, such as a misrepresentation on the application by you or the dealership, the dealership assumed your credit was good enough, or the car doesn’t yet have insurance or meet the bank’s loan requirements.
Unless you see the title or run a VIN history report, there’s no way of knowing that a car title has a lien on it. Sometimes dealerships will have their own liens placed on their inventory if it was purchased at an auction or with a line of credit. Normally this lien gets paid off right away with the proceeds of the purchase, but there are instances where the dealership forgets to remove it, neglects to do it, or shuts down before they get the chance. If you’re purchasing from a private seller, it’s possible that the title they’re giving you is not the current title that reflects the lien. To remove a lien on your car title, you must receive a vehicle lien release from the lienholder. If you were not the original borrower, send the lienholder a letter of non-interest. The only way to remove a lien from a car title is to obtain a vehicle lien release or a letter of non-interest from the lender.
If you’ve purchased a vehicle with a loan, whether through a financing company or your dealer, then you likely have a lien on your title. Once your loan is satisfied, be sure to release your lien as soon as possible to ensure you have a clean title in your name. Until you request the lien release, the lien will stay on your title and in your lender’s name. If it’s your car, you deserve a title in your name.
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The mechanic’s lien title scam is one of the oldest title scams in the book. As a consumer, you may not be familiar with the steps of a mechanic’s lien process, but what you should know is that it’s a powerful legal process that is not taken lightly.
A mechanic’s lien is a legal right that attaches to real property (in this case, the property being the vehicle) and protects mechanics who have done work on a car. Mechanics are able to file liens against cars after they have performed repairs/repairs on them because they have been damaged by the owner. The purpose of this law is to prevent mechanics from having their work go unpaid by people who abandon their cars before paying for repairs.
Similar to a mechanic, towing companies and storage facilities can also file mechanic’s liens, sometimes referred to as towing liens or storage liens, respectively.
Scammers will use skip tracing technology to search through repo lists, delinquent loan lists, and other collection agency lists. Once their lists are created, they will contact these people saying that they can get them a clean title for their vehicle, despite the owner being behind on their loan payments.
The scammer, who is actually an unscrupulous body shop or fake company posing as a legitimate body shop, will charge the vehicle owner hundreds of dollars for their clean title and will typically keep the owner in the dark about the title recovery process being used. After receiving payment, the scammer will use the mechanic’s lien process to apply for a new certificate of title for the vehicle.
In most states, the mechanic’s lien process requires that the vehicle be sold at auction to the highest bidder. The scammer may require you to bid on your own vehicle to get it back, or it may end up being sold to someone else. Regardless, once the car has been sold under a mechanic’s lien auction, it cannot be undone.
There are many reasons why this mechanic’s lien title scam is illegal. The main reasons are fraud and that the process is being misused. This scam not only defrauds the vehicle owner but also defrauds the lender by improperly removing the loan and the next buyer by giving them an invalid title. You can use the mechanic’s lien process to get a title, but only if the vehicle and circumstances meet very specific requirements. The mechanic’s lien process cannot be used to remove a lien that has not yet been satisfied.
The bottom line is – if someone says they can get you a clean car title using a mechanic’s lien process, it’s a scam. The mechanic’s lien process is only applicable under very specific circumstances and cannot be used by consumers as a method of title recovery. When in doubt, ask questions and get legal advice if needed. If it feels too good to be true, it probably is.
The certificate of car title is a legal document that proves ownership of a car. You can’t just assume ownership by buying a title or even printing yourself a new one — it’s been legally issued by the state’s governing title agency, and can be considered invalid if it has any marks, changes, or otherwise has been tampered with. So what happens if there is an error on your car title?
A car title or certificate of title is a legal document that establishes ownership of a car. car titles are only printed by the DMV or another authorized state agency. The car title is given to the buyer typically at the time of purchase when ownership is signed over by the seller or dealership.
The DMV considers anything that wasn’t printed by them on the original title to be an error. This includes, but is not limited to:
If you notice an error on your car title, it’s important to address it with your state DMV as soon as possible. An error on a car title can be a misspelling of names, an inaccurate odometer statement, an incorrect sale date, or other miscellaneous errors. An error is not considered to be title document damage, mutilation, or loss of the car title. Do not attempt to make any changes yourself or it may invalidate your title and put your legal ownership status at risk.
Most states actually have a process to fix errors on car titles. In Indiana, it’s called an Affidavit for Certificate of Title Correction. To fix errors on your car title in Indiana, simply complete the Bureau of Motor cars (BMV) form 55582 and submit the completed form to the BMV office. This process is for titles completed in error only and will not work for title transfers.
If your car title is lost, damaged, or stolen, it’s not considered to be a car title error. In this case, if you were the last titled owner, you may be eligible to simply apply for a duplicate title in your state. Be advised that a duplicate title can only be produced from the state DMV where the car was last titled. Additionally, only the registered titleholder in the state DMV records is able to apply and receive a duplicate title. Most states charge a duplicate title fee ranging from $2-$25 per application.
When buying a car, make sure to check the title and the ID of the seller before buying and transferring the title. Once you have received your title, keep it in a safe space. If you know there are issues on your title, get them fixed as quickly as possible to avoid delays further down the line.
Are you looking to replace a lost title? If you were the last titled owner of the vehicle, a duplicate car title process is likely the best way to recover your lost title.
A duplicate car title is a very common method of title recovery. A duplicate car title is simply an identical copy of a car title that can be issued by the DMV when the original car title has been lost, damaged, or stolen. Just like for traditional title transfers and other methods of title recovery, the DMV or equivalent in your state will issue your duplicate car title. Every state in the US provides some form of duplicate car title process.
If you recently moved out of state and need to obtain a duplicate title, you won’t be able to get one from your current state. Duplicate titles are only issued in the state where they were last titled. To obtain a duplicate title from your previous state, either visit the state to apply in person if you can or apply by mail to the state DMV or equivalent.
The DMV takes the condition of the application seriously. If there are rips, spills, tears, stary markings, erasures, or any other visible damage to the application, it will become void and you will have to resubmit. Additionally, make sure all names are listed and suffixes are provided if applicable. Your duplicate car title application contents must identically match what is shown on the title. If there are two or more owners, they all must be listed and sign the application.
In order for a duplicate car title to be issued, it must be free of liens and security interest. If you have a lien on your title, you must obtain a lien release letter or letter of non-interest from the lienholder and include this with your application.
This may sound counterproductive because the DMV doesn’t accept photocopies of documents, but the photocopy should be kept for you and for your reference. In the event that there are questions about the application during processing, you will have a copy of the application to refer back to if needed.
Depending on the DMV location, if you are able to submit your application in person, sometimes this yields quicker results. When applying in person, you submit your application directly to the DMV agent who processes it usually in real-time. In these cases, sometimes it’s possible to get your duplicate car title back on the same day. If you cannot go in person or do not wish to, submitting a duplicate car title application via mail is perfectly acceptable. The only downside to submitting via mail is it may take a bit longer or get lost in the mail.
If you were the last titled owner of your vehicle and you are looking to replace your car title, the duplicate car title process is a straightforward option for title recovery. If you were not the last titled owner of your vehicle, but you are looking to replace your car title, consider other methods of title recovery. If it’s your car, you deserve a title in your name.
An abandoned vehicle is one where the vehicle owner has dumped the vehicle with no intention of returning to claim it. Typically, if you know where the vehicle came from or who it belongs to, it’s not an abandoned vehicle. There are many ways to claim a vehicle that is abandoned on your property, the first thing to do is to avoid calling the vehicle abandoned. Depending on the jurisdiction, referring to the vehicle as abandoned to the DMV or law enforcement will automatically trigger the removal and disposal of the vehicle. In many states, you cannot get a title for an abandoned vehicle without going through an auction process.
If you are a private property owner who has been left with an abandoned vehicle on your property, it can be incredibly stressful and overwhelming to have to deal with the necessary steps to get rid of the vehicle. This blog discusses general steps to take if you have discovered an abandoned vehicle on your property and what other options for title recovery may be available.
Each of the 50 US states has a different process to file for an abandoned vehicle. With each state having different legal requirements, it’s important to contact an attorney that specializes in vehicle title laws in your state. This article is not legal advice, we recommend speaking to an attorney prior to beginning your abandoned vehicle process.
What are your intentions with this abandoned vehicle? Abandoned vehicles aren’t necessarily a “finder’s keepers” type of situation. In most states, if you file an abandoned vehicle, you’re intending for the vehicle to be towed and disposed of. Many abandoned vehicle title processes do not allow for the property owner to take possession of the vehicle. If you’re planning to keep the vehicle and possess it or sell it, consider other title options such as a bonded title or a court-ordered title.
A court-ordered title may be a valuable alternative to an abandoned vehicle process. A court-ordered title can be applied for by filing a court case with your local county or circuit court to declare you as the vehicle owner. This is often the last resort title recovery method, but it is a great choice if you are missing most or all of the ownership paperwork. This is not legal advice, before using this method, be sure to obtain good legal advice for success in your county and state.
A bonded title may be a valuable alternative if you live in a state that allows for this method. A bonded title requires you to obtain a surety bond to secure the title of the vehicle. Obtaining the surety bond releases liability from the DMV in the event that there is an ownership discrepancy over the vehicle.
The Driver’s Privacy Protection Act (DPPA) is a federal statute that protects driver information from being public records. According to the DPPA, to obtain personal driving information, an individual or organization must submit an official form to the state DMV requesting specific information. To obtain information protected by the DPPA, you must disclose your reasoning in your official request. Just because the DMV receives your official request form doesn’t mean they will give out the information. The information you obtain from the DPPA request can help you locate the prior owner and will assist in the title or removal process. Not all states allow for this information to be requested. Arkansas and Wyoming do not allow for DPPA information to be provided about other individuals, in these states you can only request your own driving and vehicle records.
In some states, the property owner must sign an affidavit that states the vehicle has not moved from the original location in which it was abandoned. By moving the vehicle, you may be inadvertently invalidating the abandoned vehicle process.
In certain cases after all other methods of title recovery have been exhausted or if your state requires it, you may need to have a judgment against the prior owner of the vehicle. Certain businesses such as storage and towing companies may be able to charge storage fees for the abandoned vehicle, but private property owners are not permitted to do the same. Private property owners can use the court process to obtain a judgment against the owner for abandoning the vehicle on their property.
The abandoned vehicle process is a complicated legal process. If you are a private property owner with an abandoned vehicle of any kind whether it’s a truck, car, motorhome, or another type of vehicle, you may be able to file for an abandoned vehicle and have it removed from your property. In most states, an abandoned vehicle title is not a regular method of obtaining a title. When choosing your method of title recovery, first decide the desired outcome of the situation. Do you want to keep the vehicle? If so, try a bonded title or court-ordered title. Do you want to dispose of the vehicle? An abandoned title process may be right for you. Always seek professional or legal advice before proceeding with your title recovery method.
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