A car lien represents an unpaid debt to a lender, but it’s not always a car-related debt. Before you purchase a car, you should check whether or not it has a lien filed against its equity. If you skip this fact-finding step, the lender who owns the lien could hold you financially responsible for the debt they are owed from the previous owner.
Title and Registration
The first step in checking for a car lien is looking over the car’s title and registration. These pieces of paperwork will indicate whether or not the car has a lien on its record and if the lien has been repaid. In the event there is a lien, ask the seller to provide you proof that the lien has been repaid and make sure it is in their name if you are buying from a private seller. Always insist upon seeing the pay-off paperwork; you should never trust the word of a private seller on this matter. If the lien is still active, and the debt is still outstanding, you should reconsider purchasing the vehicle.
Vehicle Identification Number
The vehicle identification number, or VIN, should also be checked against the title and registration you are shown. The car’s VIN is 17 numbers generally located on the driver’s side of the dashboard. Be sure these numbers match those on the paperwork exactly; otherwise, there may be a lien against the car you are unaware of until you attempt to register the vehicle. If these numbers do not match, you should immediately walk away from the deal.
After you check the VIN, you can use the number to request a vehicle history report from the Department of Motor Vehicles. The detailed history will indicate whether there is a lien on the car that did not appear on the title or registration.
Independent Search
The Department of Motor Vehicles is not the only place you can search for a detailed history of the car you are thinking of buying, including checking for an outstanding lien. Armed with the car’s VIN, you can run an independent search using one of several online car history search providers. These histories are usually as complete as what the DMV is able to provide, listing owners, accidents, and both paid and unpaid liens.
While shopping for used cars, always check for a car lien that has not been repaid. Avoiding a lien can save you time and money while registering the newly purchased car.
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