You’ve searched and searched for the perfect used car and now that you found one, you're ready to buy…
But did you know if you purchase a pre-owned vehicle with a lien, you are responsible for payment of that lien before you can transfer the title into your name?
That’s why it’s really important to find out about any and all liens prior to making that purchase
... A little background on financial liens
Financial liens appear on the front of a vehicle title, in the space marked “lienholders.” These are typically placed by a bank or other lending institution as the result of a loan made when the vehicle was purchased by the current owner.
Financial liens are generally on the title for a defined period of time. When they’re paid off, the vehicle owner receives a “lien release.” The owner may then take the lien release to an MVD office or an authorized third party office to obtain a new, clean title.
Note to buyers: it’s also acceptable for a seller to give you a signed and notarized title with a lien release from the lender (more on that later). Other types of liens
There are additional types of liens that can be added (or deleted) electronically to a title at any time. These are not for a defined period of time and are NOT shown on the title.
For example, if a vehicle owner owes child support fees or court fines/fees, a lien can be placed on the vehicle record that prevents the title from being transferred to a new owner until those fines/fees are paid.
Of course, if the seller isn’t being honest with you (the buyer) and accepts your money for the vehicle without clearing the title, you would not be able to properly transfer the title into your name until the liens are paid. How to protect yourself from purchasing a vehicle with a lien
First, look at the title to see if there is a lienholder recorded.
If there is, then the seller must have a notarized paid receipt (lien release) from the lienholder describing the vehicle, the name of the seller and the date and amount of the lien. The seller must give you the original paid receipt along with the title. Be sure to verify that all the information on the paid receipt matches the information on the title.
Whether there’s a lienholder listed on the title, or not, it’s always a good idea to ask the seller to go with you to MVD or an authorized Third Party office to transfer the title (many Third Party offices are open evenings and weekends).
One last tip: do NOT pay for the vehicle until you have verified the title can be transferred.
And remember, liens aren’t the only thing to look out for when purchasing a vehicle from a private seller. Over on the MVD web page there’s a whole list of situations to be aware of when purchasing your next pre-owned vehicle