Realizing that you bought a car with a lien on the title is frustrating to learn, to say the least. If the title has a lien leftover from the prior owner, why should you be stuck with it? If you bought a car with a lien on the title, don’t fret, here are some steps you can take to get a clear title in your name.
If you have the title, contact the lender printed on the front.
If the vehicle you bought has a lien on the title, you will be able to identify the lienholder printed on the front of the title above or below the individual owner’s name. Take note of the name of the lienholder and research their name in your state’s Secretary of State corporation database. Once you have the addresses and names of the lienholder, send by certified mail a request for lien release and a letter of non-interest.
It’s important to note that you cannot transfer a title that has an active lien on it. At this point in the title process, the prior owner is still the registered owner. If you can get their assistance in this process it will make the process more streamlined. Without the registered owner, you may have problems receiving information from the lienholder. It is illegal to contact the lienholder impersonating the registered owner to obtain a lien release.
If you can get the registered owner to obtain a lien release or letter of non-interest, they can then apply for a duplicate title in their name without the lienholder and then sign the new title over to you.
If you do not have the title and you know the prior owner, contact them to obtain a lien release.
First off, you should request the prior owner give you the certificate of title. When purchasing a vehicle, the vehicle certificate of title is the most important document of the process. The prior owner should obtain a lien release or letter of non-interest, then apply for a duplicate title to transfer over to you without the lien.
If you do not have the title and you do not know the prior owner, contact your local DMV office.
If you bought a car with a lien on the title, but you don’t have the prior title and can’t contact the prior owner, submit a DPPA motor vehicle records request form to your local DMV. Not much can be done to remove the lien without the knowledge of the registered owner, the lienholder, or the original certificate of title. Before proceeding with your lien release process, you will need to attempt to contact the prior owner and pursue an alternative method of title recovery if needed.
Keep in mind that in most jurisdictions, it is illegal to sell a vehicle with a lien on the title. If the title has a lien, this means the vehicle is technically owned by the bank or lender, not the individual owner. A lien is only removed once the loan is paid back in full or released willingly by the lender. If it’s not your lien, don’t get stuck with it on your vehicle title.