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How To Find Out If A Car Has a Lien On It & Other Steps In Purchasing A Vehicle

Car Registration Vs. A Car Title

What is the difference between a car registration and a car title? The vehicle title relates to the ownership of the car and informs the state of the legal vehicle ownership. It also lists any liens on the vehicle.

The vehicle registration relates to the license plates and license tags on the car. License plates provide revenue to the state and are revenue for your state DMV. A car title will not provide information regarding the car registration or the car license plate. The car registration should be kept in a secure place. Your car registration should be kept in your vehicle (You know the line, “License and registration please”).

What Is A Car Lien?

The car lien is the official document a loan company (whether a bank, credit union, private party or another interested party) has against the vehicle in exchange for the vehicle loan. Most typically a lien is used in a car loan. The lender, in exchange for their money to buy your car, places the lien against your vehicle and secures their interest. If you fail to repay their loan, the lienholder has a legal right to repossess the vehicle and either keep the car for themselves or resell it to retrieve their monies.

Another way a car or truck can be applied is when you fail to pay required governmental vehicle taxes and/or fees. If you don’t pay or have an outstanding balance your local government may elect to place a lien on your vehicle.

IMPORTANT: Liens can pass to a new owner if the car is sold, so before buying a used vehicle it is important to verify there are no outstanding liens against it. Get a VIN Number Check.

How To Make Sure A Vehicle You Want To Purchase Does Not Have Any Liens

1.  First Thing First – Examine The Title

Take a detailed look at all of the paperwork related to the vehicle, especially the title and registration. Is the title in the seller’s name and is the registration current?

What to expect to see on the title: Title information does vary by state, but generally a car or truck title will provide information related to the current owner, past owners, and any current or past liens on the vehicle.

VIN Tip: When you are buying a car from a private seller, ask to see their ID and match that name to the title. If you can take pictures of the seller’s ID, the title and the registration for your records.

2.  Determine If You Require Additional Paperwork.

If the event a vehicle title indicates there has ever been a lien on the vehicle the seller must produce proof that the lien has been satisfied or you can incur the lien with your car purchase.

VIN Tip: If a seller can not produce verification of the lien release, proving the lien has been satisfied, don’t proceed with the purchase.

VIN Tip: If you do decide to buy a car that has had a lien against it, be sure that you have possession of all lien release documents when the sale is complete as you will need them when you eventually sell the vehicle.

3. Match The VIN Number On The Title To The Vehicle.

Get the VIN number from the car (often you can the VIN number by standing outside the vehicle on the driver’s side and look at the corner of the dashboard where it meets the windshield. If the VIN cannot be found there, open the driver’s side door and look at the door post on the driver’s side door). Next match that VIN number to the title, registration and any other documents including any lien release documents.

VIN Tip: The VIN number can be found on a small metal plate on the dashboard of the vehicle on the driver’s side. It is a 17-digit number that contains both numbers and letters. If the VIN plate is missing, altered, if the Vehicle Identification Number is incomplete, or the number doesn’t match the one on the vehicle documentation, do not buy the car.

VIN Tip: Have ALL the documents in order. If a seller does not provide you with a copy of the title, current registration or lien release document, do not purchase the vehicle until they can produce all of these documents.

4. Do a VIN Number Check (located at the top of this page)

After you have secured and verified the vehicle’s VIN number you can you perform a VIN check. This CarFax report which will alert you to any liens on the vehicle as well as give you a history of that car, for example, if it has ever been in an accident. It is recommended that you pull a vehicle history on any car you are seriously considering.

What Will a Vehicle Identification Number Report Reveal About A Car Or Truck?

A CarFax Report will provide you with the following information:

  • Vehicle past ownership.
  • Any liens reportedly held on the vehicle.
  • Vehicle maintenance reports.
  • Title history including any blemishes.
  • Faulty or altered odometer settings.
  • Damage due to flooding.
  • Car accident history.
  • Car title check.
  • Lemon vehicle report.
  • Any airbag deployments.

Order your CarFax report at the top of this page.

Mistakes Happen. Not surprisingly there can be errors or paperwork issues with your DMV. It is not your problem to sleuth and correct any issues. If the seller claims they have paid the lien but the title still shows a lien on the vehicle, it is possible that the DMV has not been properly notified of the lien payment, but the seller needs to take the initiative to clear the lien.

It is also possible that the seller has lost the lien release payment. If that is the case, they will need to go back to the bank or financial institution to get a copy of it to bring to the DMV.

5. Use The DMV’s Title Checker Service

If you still have questions, visit your state’s DMV site and see if they have a title checker feature. See links to your State DMV here.

It varies by state but most have this feature. It allows you to put in the VIN number of any vehicles you are considering and it will pull up the title information on record. You should be able to determine if the car has a lien against it.

Finally…

If, after your VIN number research, the car title shows as clear, you can proceed with your purchase.