We are an independent, advertising-supported comparison service. Our goal is to help you make smarter financial decisions by providing you with interactive tools and financial calculators, publishing original and objective content, by enabling you to conduct research and compare information for free - so that you can make financial decisions with confidence.
Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover.
The offers that appear on this site are from companies that compensate us. This compensation may impact how and where products appear on this site, including, for example, the order in which they may appear within the listing categories, except where prohibited by law for our mortgage, home equity and other home lending products. But this compensation does not influence the information we publish, or the reviews that you see on this site. We do not include the universe of companies or financial offers that may be available to you.
Written by
Rebecca Betterton
Rebecca Betterton, a Certified Financial Education Instructor℠, is a writer for Bankrate who has been reporting on auto loans since 2021.
Edited by
Pippin Wilbers
Pippin Wilbers is a Bankrate editor specializing in personal and auto loans. Pippin is passionate about demystifying complex topics, such as car financing, and helping borrowers stay up-to-date in a changing and challenging borrower environment.
At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict editorial integrity , this post may contain references to products from our partners. Here's an explanation for how we make money .
Bankrate logoFounded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next.
Bankrate follows a strict editorial policy, so you can trust that we’re putting your interests first. All of our content is authored by highly qualified professionals and edited by subject matter experts, who ensure everything we publish is objective, accurate and trustworthy.
Our loans reporters and editors focus on the points consumers care about most — the different types of lending options, the best rates, the best lenders, how to pay off debt and more — so you can feel confident when investing your money.
Bankrate logoBankrate follows a strict editorial policy, so you can trust that we’re putting your interests first. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions.
We value your trust. Our mission is to provide readers with accurate and unbiased information, and we have editorial standards in place to ensure that happens. Our editors and reporters thoroughly fact-check editorial content to ensure the information you’re reading is accurate. We maintain a firewall between our advertisers and our editorial team. Our editorial team does not receive direct compensation from our advertisers.
Bankrate’s editorial team writes on behalf of YOU – the reader. Our goal is to give you the best advice to help you make smart personal finance decisions. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. So, whether you’re reading an article or a review, you can trust that you’re getting credible and dependable information.
Bankrate logoYou have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey.
Bankrate follows a strict editorial policy, so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers.
We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money.
Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories, except where prohibited by law for our mortgage, home equity and other home lending products. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range, can also impact how and where products appear on this site. While we strive to provide a wide range of offers, Bankrate does not include information about every financial or credit product or service.
A lien allows a lender to protect itself if a borrower defaults on a financed vehicle. It is the lender’s legal right to the vehicle, and it remains in place until the loan has been fully repaid.
If you recently bought a car with a lien on the title, take these steps to put yourself in a less precarious financial situation. Here’s how to get a lien released from your new ride.
While having a lien on your vehicle may feel daunting, it is not uncommon.
Vehicles financed with an auto loan are typically put under a lien until the loan is paid off. This gives the lender the legal right to keep the vehicle’s title until the loan balance is paid off. If there is a lien in place on a vehicle, lenders or creditors can repossess the vehicle if the loan has not been paid off or falls into default.
Some drivers do not understand how a lien works until they try to sell their vehicle and realize they cannot.
A lien also influences the cost of your auto insurance.
Buying a used car shouldn’t come with any strings attached — especially not a lien from the previous lender. Although it may take some legwork and time, you can probably get your issue resolved at little or no cost.
It’s best to handle the removal process before you finalize your purchase. It will cut down on the headache of transferring the title into your own name. And if you pay with a loan, your lender may not be able to complete the financing process until the previous lienholder releases the title.
When purchasing a used car through a dealer, ask the salesperson whether there is a lien on the vehicle. In such cases, the dealership typically handles clearing up the lien. If you’re getting a loan to finance the purchase, your lender will become the new lienholder.
If you are buying a car through a private seller, ask that they provide you with proof that the car loan was paid in full, such as canceled checks or a paid-in-full letter. The seller is responsible for paying off the loan so that they can transfer the vehicle’s title. You can include that requirement in your purchase contract.
It’s also a good idea to contact the lender directly and check the lien status. You can do so before finalizing the purchase. Ask about the total amount due to release the car and other stipulations that might affect the sale.
If the lienholder is a bank that failed (or is a subsidiary of one), you will face a few extra steps.
When buying a used car from a private seller, have the seller provide you with a letter from the lender stating that the lien has been released. Check with your DMV and the car’s vehicle history report to confirm there is no lien.
Sometimes, when a title lists a lien, the loan has been paid in full — it just hasn’t been released properly. This can happen because of a bank error, merger or failure. Look out for this when working with the seller.
Lien information can be found with the DMV and the vehicle history report.
Not everyone has to go through the lien-removal process. Buying from a dealership often means you don’t have to handle the paperwork.
If a lien is in place, removal should be relatively simple. It can take some time to get the right paperwork in order. Once the previous owner has paid off their loan, you or your lender can move forward as the primary lienholder.
Arrow Right Writer, Auto Loans and Personal Loans
Rebecca Betterton, a Certified Financial Education Instructor℠, is a writer for Bankrate who has been reporting on auto loans since 2021.
