Someone Sold ME a Car With a Lien on It Without Telling ME: What You Need to Know

Nobody wants to hear or say, “Someone sold me a car with a lien on it.” Acquiring a vehicle is a substantial financial commitment, and learning that your just-purchased vehicle is still subject to a lien is extremely annoying. It may affect your ownership rights to the new car you bought.

It can be difficult to deal with an automobile that has an existing lien, but do not worry! In this blog post, we’ll go over the legal issues, what to do if you have the title or not, and how to look for liens on cars.

Lien on Title: What Does It Mean?

A “lien title,” usually referring to a title for a vehicle, is a title that has had a levy or lien placed on it by a third party that used the vehicle as security (usually a loan or outstanding debt). In these situations, the person with the physical title until the debt or claim is paid is typically the lien holder.

A Lien Title: Is It Bad?

There are two ways to interpret lien titles; therefore, providing a solution to this subject is challenging. On the one hand, since most cars are purchased with financing of some kind, lien titles are just as frequent as mortgages. However, there are two major reasons why having an outstanding lien on your car can make it very difficult for you to sell it:

Even if done correctly, removing a lien requires processing and documentation, which takes time. It cannot be done electronically.
Since most buyers want to pay and drive away rather than participate in a process, selling a car privately with a lien is essentially a deal breaker. Even at fair prices, a vehicle with a lien warns potential buyers that the price cannot be adjusted, which is somewhat off-putting.

Apart from those two situations, there are no issues at all if you want to trade in or sell a car with a lien to a dealership or an auto-buying agency. For them, today is just another workday. In summary, the relative merits of a lien title will depend on your particular situation and how you want to sell the vehicle.

Is it against the law to sell an automobile that has a lien?

Cars with liens are difficult to sell legally and come with a lot of requirements. A loan or other outstanding debt owed by the owner against the car results in the creation of a lien. Until the debt is settled, the lienholder—typically a bank or lender—has a legal claim. In many countries, it is illegal to sell an automobile with a lien without paying off the loan. Selling an automobile with a lien can have serious repercussions, such as fraud accusations, legal issues, and repossession. Contact the lienholder and work out a workable arrangement to sell an automobile with a lien legally.

Someone Sold ME a Car With a Lien on It Without Telling ME: Selling a Dealer a Car That Has a Lien

Even if you’re not purchasing a new vehicle, selling your existing vehicle to a nearby dealer is a straightforward choice. With Power of Attorney, the dealer takes care of immediately repaying the loan, selling the vehicle, and putting the remaining funds toward your subsequent purchase.
It won’t always work like this. If they are unable to recoup the whole amount you owe them, they will turn down your car.

Additionally, it won’t function if the lien is a mechanic’s lien, an IRS lien, a court judgment lien, or any other kind of complex circumstance. It is only compatible with conventional liens, which are the outcome of auto title loans.

Important Information Never return your car to the dealership before you have all the necessary paperwork proving the lien has been fulfilled.

Someone Sold ME a Car With a Lien on It Without Telling ME: Car Sale with Lien to a Private Individual

Although it takes a bit more work, this procedure is entirely doable. Since you may obtain more for the car this way, a lot of individuals would rather put in the extra work. This entails using the buyer’s funds to repay the debt. Go to the next section below if you wish to transfer the loan.
To guarantee a seamless transaction, take into account the following:

Make sure your ad discloses the specifics of the lien. Simply construct the advertisement as normal, then include the lien’s details.
If at all possible, try to sell where your lienholder is selling. For instance, the bank holding the lien’s parking lot.
Once you and the buyer have agreed on a sum, you can pay off your lien at the lender. After that, your financial institution can give that person direct ownership. Transferring the title into your name is not necessary.
Selling a vehicle with an active lien without informing the buyer is illegal.

What Should I Do Now That I Bought a Car With a Lien?

If someone sells a lien-free car without informing you, it is illegal. The money was transferred due to a civil issue, and you will not receive your refund based on this fact.
To find out what to do next, you can either research state laws or speak with an attorney because every state can and often will have distinct rules.
One factor that could affect your possibilities is the vehicle’s price since small claims courts often cap awards at $5000.

Someone Sold ME a Car With a Lien on It Without Telling ME: How to Proceed If You Own the Title

If you discover that your car has a lien and you have the title, there are several steps you can take to resolve the issue. To begin with, thoroughly check the title to make sure no liens are present. Next, get in contact with the lienholder to talk about the remaining amount.

Pay off the lien if settlement talks have resulted in an agreement. To verify that the lien has been fulfilled, ask the lienholder for a document releasing the lien. To change the title and reflect the lien’s release, provide the lien release to the relevant authorities.

How to Proceed If the Title Is Not Available

If you discover a vehicle lien without the title, you may take additional actions. To begin, thoroughly investigate the lien to obtain specifics about it, including the name and contact information of the lienholder. Speak with the lienholder to go over the unpaid amount and look into possible fixes.

Reaching a settlement or moving the lien to another asset can be feasible. If negotiations fail or the situation becomes problematic, it’s advisable to seek legal counsel from a lawyer with expertise in lien-related matters. In the end, your local DMV ought to be able to assist.

Someone Sold ME a Car With a Lien on It Without Telling ME: How to Look Up Liens on Cars

The Vehicle Identification Number (VIN), a special code given to each car, is required to search for liens on vehicles. Use the VIN to perform a lien check via internet resources or by visiting your local Department of Motor Vehicles (DMV).
If you’re unsure about the procedure, you may also speak with a lawyer who focuses on car-related legal issues or employ a reputable title search business.

In summary:

Finding out you recently bought a car with a lien on it can be difficult. Even if selling a car with a lien may not be against the law, the seller must disclose the lien’s presence. You must take the right actions to resolve the lien situation, whether or not you own the title.
Through diligence, information gathering, and professional consultation when needed, you can handle this scenario and make sure it ends amicably.