Lien Title
If you have a loaned car, you may have faced such a problem as a lien. However, a car lien can be a serious barrier if you need to cover the auto insurance that every driver should have. Also, you will not be able to sell your car with a title on it until you fully repay the loan and remove the lien from the car title. So what is a lien on a car?
A lien is a lender's claim for repayment of a loan registered against a vehicle. Of course, if you borrow a car, the lender holds the car title. Thus, he is usually the lien holder until you fully repay the loan. Thus, the lien holder can apply for a lien on the vehicle, and after the car loan is repaid, the lien holder will usually send a release document to the state transportation agency. There you can renew and transfer ownership of the car.
Who holds a lien on a car?
As you know, the person granting you a car title loan is a lien holder. This person is the legal owner of your car until you pay off the loan and receive title. And for additional protection, liens may require you to have certain types of auto insurance, such as comprehensive and collision insurance. Also, a mechanic can also seize a vehicle. In some states, mechanics can place a lien if they do not get paid for the job for a certain period of time.
How to sell a car with a lien?
If you want to sell your car, but have not paid the loan yet, then this can be a problem. Since the lender is the owner of the car until the loan is repaid, he is the lien holder. Thus, in order to sell the car, you will need to fully cover the loan and obtain ownership. When you get the title transferred to you, you can transfer the title to another person and sell your car.
How to buy a car with a lien?
A similar situation occurs if you want to buy a car from a person who is still paying a loan for it. You can only get the car title when the owner of the car transfers it to you, but in order to do this, he must pay off the loan and own this title himself.
Also there are situations when the person paying off the car loan wants to sell the auto because he can no longer pay the money. In this case, you should contact the lien holder. In such a situation, the buyer can pay the remainder of the loan to your lender and obtain a car title.
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