After home purchases, buying a vehicle is the second-most expensive purchase that most people make in their lifetimes. Unlike real estate, though, there is much less paperwork involved in a vehicle purchase. Therefore, consumers often must protect themselves by understanding the process and the potential impasses. One issue that crops up often is the existence of a lien on a vehicle. A lien can stop the vehicle title from being transferred from a seller to the buyer. Therefore, it is important to understand who might have a lien on a vehicle and check on lien holders.
New Cars
When new cars are purchased, the title is given to the buyer only if there is no creditor with an interest in the vehicle. In most vehicle purchases, the buyer obtains a car loan to be used for the purchase of the vehicle. The creditor becomes a lien holder on the vehicle. This means that the creditor has an ownership interest in the vehicle. This lien remains in place until the creditor releases it. Generally, that takes place when the car loan is paid in full.
Used Cars
When a used car is sold by the owner, there might not be any lien holder. The owner should have the title, and if it shows no lien holder, the buyer can be assured of a smooth transaction. In some cases, though, a consumer sells the vehicle before the car loan is paid in full. When this happens, the sales process cannot be completed until title is transferred, and that does not take place until the original auto loan is paid. Only then will the creditor release the lien. Because many owners do not want to give their money to the seller until the seller can provide a clear title to the used vehicle, many times the sales process takes place at the site of the lien holder. This allows the buyer to witness the seller paying off the lien, and the buyer receives the clear title to the vehicle at the same time.
Other Lien Holders
In some cases, vehicle owners who do not have auto loans still have liens on their vehicles. These liens are often created because vehicle owners use their vehicles as collateral to acquire other loans, including short-term loans from companies such as American General Finance. In these instances, the question of who holds a lien on the vehicle is more complex. The vehicle owner is less likely to be aware of the lien, and it might require a title inquiry by the vehicle owner to determine who has a lien on the vehicle. This could be the case when an individual is named the executor in a will and is charged with awarding ownership of a vehicle to the individual named in the will. It is also possible for an individual to establish a lien on a vehicle. Regardless of who holds the lien, the information regarding the lien should be listed on the vehicle title. It is important for a vehicle buyer to contact all parties listed as current or former lien holders prior to completing the purchase of a vehicle. The buyer can ask each person whether the lien has been removed.
Title Lien Search
While property title searches often require the use of a title search company or a private attorney, the average consumer can perform a vehicle title history search to determine all liens on a vehicle title. The National Motor Vehicle Title Information System was created by a federal law and is administered by the U.S. Department of Justice. The NMVTIS uses three vendors to provide title searches for consumers, law enforcement and other entities who might inquire about a vehicle's title. Generally, consumers are allowed to use the system only when they are buying a vehicle. By using the service, consumers can obtain a list of all current and past lien holders on a vehicle. Thie system's vendors obtain this information from its network of state departments of motor vehicles. The service provides great help when a vehicle is being purchased and the seller has not disclosed the existence of one or more lien holders. In some cases, the seller might not be aware of a lien. Therefore, it is important to do a search even when a seller seems to be honest and forthright.
Related Posts:
Obtain An Automobile Title From Chrysler Credit
Chrysler Credit Corporation, now Chrysler Financial began in 1964.Chrysler Credit, today known as Chrysler Financial, is the automobile financing wing of Chrysler, the American-based car manufactu...
Get A Personal Loan With A Cosigner
Even if you have shaky credit history or little to no credit history at all, you may still be able to get a personal loan if you bring a cosigner on board with you. With this type of loan, the cos...
Float Candles In A Pool
There are a number of ways to float candles in a pool, depending on the size and the shape of the candles. There are floating candles that are wider at the top than at the base. Some of these can...
Spot A Fake Chi Hair Iron
Counterfeit is rampant and it doesn't discriminate, not even against hair products. CHI has a popular line of flat irons that often sell for more than $100. This price far exceeds a lot of other f...
Make Pennyroyal Tea
Make Pennyroyal TeaPennyroyal is an aromatic herb related to mint and is used extensively in aromatherapy and traditional herbalism. It has been used for medicinal purposes, and in colonial times,...
