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How to Clear a Lien on a Car Title

  • 4 min read

The terms lien title and vehicle lien release may seem to have negative connotations, but a lien on a vehicle title is actually extremely common. If you’ve purchased a vehicle with the assistance of a loan from a lender, that lender places a lien on your title until the loan has been paid off in its entirety. A lien is a claim on the property for the security of payment. When a lender loans a borrower (you) money to purchase a vehicle, they want to make sure that they are paid back plus interest. Your lender, also known as your lienholder, will remain printed on the front of your vehicle title until the loan is paid off. A lien on a vehicle title is a cloud on the title that places a hold on ownership; once it’s paid off, you can get a title for your car or you can sell it or trade it in.

In most states, the lienholder will hold on to your title until you have paid off your loan. On the other hand, not all states are like this—some will send a title to the vehicle owner with the lienholder and the owner holds the title until the loan is paid. The lender will stamp the title as paid and mail it off to you. However, just because your loan is paid doesn’t mean that the lien has been released; it’s up to you to go through the lien release process and notify the DMV of your satisfactory payment.

How to clear a lien from DMV records

The easiest way to release a lien–a legal claim against your vehicle for unpaid loan amounts–from your vehicle title is to contact the lienholder directly and request them to email or fax a lien release to you. The lienholder is the only authorized agent to release the lien from the title. If the lienholder doesn’t reply within twenty-four hours of your initial request, try contacting them via mail. Research their address along with any other address locations you can find. Then by certified mail, send the lienholder your state’s lien release request form along with a letter of non-interest. A letter of non-interest is a document that states that the lienholder no longer has any interest in pursuing the amount loaned on the vehicle and can be sufficient to release the lien. Make sure that all portions of the forms are completed in their entirety and notarized if needed. We recommend including a return envelope with a stamp for added convenience.

Vehicle Lien Release Frequently Asked Questions

Can you sell a car with a lien title?

No, in most jurisdictions it is illegal to sell a car with a lien on the title. This is because if it has a lien, then the vehicle is owned by the bank or the lender, not the individual purchaser. A lien is only removed once the loan is paid back in full or released.

Can you buy a car with a lien on it?

We don’t recommend it. If the vehicle you’re buying has a lien on the title, it could be a red flag of a fraudulent transaction. If you purchase a car with a lien on it, you should dispute the lien with the lender. You as the new owner should not be held responsible for the prior owner’s default of payment.

Can you transfer a car title with a lien on it?

Similar to selling a car with a lien, you can’t transfer the title to a new name until the lien is paid off or released. Transferring a car title will not remove the lien.

How do you find out if a car title has a lien?

If you have financed a vehicle and made monthly payments, you more than likely have a lien on your title. If you’re not sure, check with your local DMV office or, if you have it, take a look at your physical car title.

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