The lien removal process varies from state to state, but usually involves a series of paperwork and fees that need to be paid to the state’s motor vehicles department.
What is a Lien?
A vehicle lien is typically a part of car title loans. The lien implies that the owner of the vehicle has been issued a loan, using their vehicle as collateral. So basically, a the lienholder will take ownership of the vehicle for the duration of the loan period.
Who is a lienholder?
A lienholder is the person or company involved in the ownership of the vehicle in a title loan. Typically, the loan borrower keeps the car to drive every day like normal when they have a lien put on the vehicle, they just have to make sure to stay on top of their monthly payments.
What are the lien types?
There are several different types of liens that can be issued against property:
- Mechanic’s lien- Also known a construction lien, is filed to protect anyone performing labor on a private project, or property. These people include contractors, architects, builders, etc.
- Towing lien- Some towing companies will place this type of lien on your vehicle if your car was parked in front of a fire station, for instance. Parking in front of a fire station is illegal, and the city has the right to tow your vehicle away if they find your car parked in this area. The towing company that the city contracted would then place a lien on your vehicle in your absence, to ensure that they will be paid their towing fees. If you do not pay the towing, storage, and daily fees (if applicable), the towing company then has the legal right to sell your vehicle to cover their costs and labor.
- Landlord lien- If you move out of a rented property, and leave behind a vehicle, mobile home, or trailer, the landlord has the right to place a lien on all of the abandoned property left on their property. The value is applied to the rent due, as spelled out in the leasing agreement.
- Abandoned vehicle lien- Is placed on vehicle that is left for an extended period of time on someone else’s property. This extended period of time is usually defined as 30 days or more. The lienholder may then choose to sell or junk the vehicle and will follow the rules and regulations of the state when doing so.
- Storage lien- Storage facilities can place a lien on a vehicle left on their property for an extended period of time and does not pay the fees.
READ MORE: TITLE LOANS IN FLORIDA
Can I Buy a Vehicle With a Lien?
It may not be in your best interest to purchase a car that has a preexisting lien on it. If the current owner took out a $3,000 title loan using the vehicle as collateral and hasn’t paid it off, you may now be responsible if you bought their car. Or the loan may be in default, which means that additional money: loan principle, interest, and late fees, will likely apply.
What Are the Steps to Removing a Lien?
A lienholder will only remove a lien after the loan debt has been paid off. After the loan has been paid off, the lienholder will send you one of the following:
- A completed “Release of Lien” form, on Motor Vehicle Division (“MVD”) of New Mexico letterhead
- A completed “Release of Lien” section on the vehicle title
- A notarized lien release on company letterhead
After receiving one of these documents and your title, you will need to take them to your local MVD. There will be fees associated with titling and successfully registering the title.
How Does LoanMart Handle Liens?
LoanMart will place a lien on your vehicle’s title for the duration of the loan period. We will happily remove our name from the vehicle’s title once you complete your convenient installments.
If you already have a title loan through another source, we may assist you in removing the lien they have on your vehicle’s title and also try to get you a better rate with us1. Note: we may only assist you if your previous title loan is paid back in full.