How to Check for Auto Liens
Checking for auto liens is an extremely important part of buying a used car. Existing liens can prevent you from transferring the legal title of the car into your name. In a worst-case scenario your new car can be repossessed by the lender that has a lien against it. Below are the most common ways to check for existing liens.
What Is an Auto Lien?
A lien is a legal document that gives claim over a vehicle to the person holding the lien. It grants a claim over the vehicle to the person who has loaned you money to buy the vehicle. It provides a person or company a level of protection in the case that you are unable to repay the loan. The holder of an auto lien has a legal claim to the vehicle and can repossess it if the loan is unpaid.
Why Check for Liens?
It is vital that you verify there are no outstanding liens on the vehicle. When you purchase a vehicle you want to have clear title to the car. If an existing lien exists you will be in for quite the surprise when you try to transfer title to the vehicle into your name and the DMV refuses your request.
DMV (Department of Motor Vehicles)
The best way to see if there is a lien on the car is to check with your local DMV. You will need the VIN (Vehicle Identification Number) of the vehicle. You might want to jot down the license plate number as well. The majority of DMVs have their databases online these days so your first stop should be their website. Usually lien information will be in the title or registering a car section of the site. Simply enter the VIN of the car and it will bring up the details or any liens. If your DMV does not have this information online you should be able to get lien information by calling the DMV office or visiting in person.
Car Lemon Report
A car lemon report such as Autocheck.com will provide lien information in their reports. You will need the VIN to pull up the report on the vehicle. Unlike the DMV, which usually provides this information for free, you will have to pay for the report, prices range from $18.00 to $35.00. The report will contain information about liens as well as any title issues, service records and other information.
If a lien does turn up on any of these reports it is important that you resolve the issue before proceeding with the purchase. Often times the lien will have been settled but the bank or lien holder has not processed the proper paperwork to remove the lien. Make sure you have a loan satisfaction letter from the bank or lien holder before closing the deal.
There are many components to buying a used car but one of the most important is checking for existing liens. You can do this at your local DMV or car lemon report sites.