So how do you get a lien release for a vehicle title if you have a car that needs to get a title and there’s a lien holder showing on that title record with the DMV? The title normally won’t be released until you have that lien cleared from the title records.
Complications in Clearing a LienSome of the complications could be if the lien holder is out of business or if the car’s not fully paid off, or if it’s an automax-type car title loan. In those cases, you have to go through a certain process.
Dealing with Out of Business Lien HoldersIf the lien holder is out of business, you have to find out where they transferred their assets to.
Dealing with Unpaid VehiclesIf the car is not paid off, you might want to do a lien mitigation to have the lien discounted to an amount that’s palatable.
Title Pawn LoansIf it’s a title pawn, you may find that the loan’s not even recorded on the title, so there might be a duplicate title possible.
Trouble Finding the Lien HolderIn other cases, if there’s any trouble finding the lien holder or finding where they are, you can maybe get a letter of no interest from the bank listed on the title, which will be the same as a lien release.
Providing Payoff DocumentsSometimes, if you have payoff documents from the bank showing that it was paid off on a certain day, the DMV may accept them.
Court-Ordered Title as a Last ResortA court-ordered title is your last resort, but if the car title loan is more than ten years old, sometimes a court-ordered title may be the way to go.
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So how do you get a lien release for a title on a vehicle when there’s a lien listed on the title? That means that the lender controls that title. They either have the physical document in hand, or they control with the DMV how that document’s going to be released.
Loan Payment and Lien ControlEven if the loan is paid off, if the lien release is recorded, that means that control of that title remains with the lender. The lender may or may not have a process for providing that document of a lien release. Some lenders don’t have specific people that provide lien releases.
Lender’s Process for Lien ReleaseUsually, what they do is when the loan is paid off, they just mail the title out, and it’s done automatically. They might even have that title document. If not, they have the lien release.
Steps to Obtain a Lien ReleaseBut if you do need one, it has to go through that lender. Now, in many cases, the process to do that may not be defined. There’s not, you know, “press 2 for lien releases” on their voicemail. So you have to get to that right person. Sometimes it’s going through different channels or having a title agent handle that for you.
So what is a vehicle certificate of origin? If you’ve seen one, it looks like a title. It has the vehicle identification number on it, but it’s not a title. It doesn’t show ownership to a retail buyer.
Purpose of the CertificateIt demonstrates that the car was manufactured by some factory. In some cases, it’s called an MSO, manufacturer’s statement of origin, instead of a certificate of origin. It’s created by the manufacturer, Chevy, Ford, Honda, Toyota, whoever it is, and it shows that that vehicle was created.
Comparison to a Birth CertificateIt is like a birth certificate. It originates the VIN number. It’s prior to titling to an individual person. It’s even prior to titling to a dealership.
Transfer and TitlingIt may be assigned to a dealership, but it doesn’t have to stay there. Another dealership could take it over; they could trade cars and then sell it to a retail buyer.
Establishing TitleIf your car has never been titled, you need to go back to the certificate of origin in order to get that origin established and then title it in your name.
Title Replacement in ConnecticutToday we’re going to talk about some of the details for title replacement in the state of Connecticut. Connecticut has a form which allows for a duplicate title to be combined with a transfer of ownership. So if you’re purchasing a vehicle or have purchased a vehicle and the prior owner doesn’t have the title, they can actually request a duplicate to be issued in your name at the same time. That’s a form H-6B. So that’s a good thing in Connecticut; you can do two things simultaneously.
Lien Release for VehiclesIf you have a vehicle that has had a lien on it, you need a lien release. If the vehicle is more than ten years old or the lien is more than ten years old, you can use an H-115 form to release that lien. That way, you don’t have to have a specific document from the lien holder.
Transferring Ownership for Older VehiclesIf the car is more than ten years old, there doesn’t need to be a title. You can use a Q1 transfer form to transfer the ownership of the vehicle. In Connecticut, their DMV headquarters is in Wethersfield. That’s the best place to go; they’ll have the most comprehensive understanding of some of these rules.
Sales and Use Tax in ConnecticutIf you have a vehicle that has some missing documentation, be aware that Connecticut has a sales and use tax. So anytime a vehicle is transferred, there’s tax due. Jumping titles or skipping titles may be a way to avoid that tax, but it could catch up with you because Connecticut will audit those transfers to make sure they get their taxes.
This is Dave at cartitles.com. In order to get a title in your name, you may have availability to use the bonded title process.
Bonded Title ProcessWhat that entails is purchasing a bond, which is a form of insurance policy, from a private company, an insurance company, and then presenting that to the DMV. They’ll use that guarantee in order to issue you a title.
Documentation RequirementsBe aware that the bonding company will also require certain documents. They’re going to need to approve that scenario. If you do not have sufficient documentation or a scenario of how you got the vehicle, the bonding company doesn’t have to issue you that insurance policy. They can reject it just like the DMV can, so make sure you collect all the documentation you can prior to approaching that bonding company.
State SpecificsAlso be aware that it is state specific. Some states allow bonded titles, some don’t. If you get a bonded title in a state that allows it and then attempt to bring that vehicle to a state that doesn’t recognize a bonded title, you may have an issue.
Bond Stamp DurationAlso be aware that that bond stamp will remain on the title for a certain period of time. It may be three years or five years; depends on the state, depends on the year of the vehicle. So make sure if you need to do something like finance a vehicle or sell it where that bonding stamp could be an issue, that you take that into account.
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