A Guide to Checking a vehicle for possible Liens Before purchase

A Guide to Checking a vehicle for possible Liens Before purchase

When shopping for a preowned vehicle it is important to research the vehicle thoroughly before committing to purchase. To ensure a smooth transaction, it's crucial to verify that the vehicle does not have any filed liens, as this is a significant consideration in avoiding potential issues.

 

A lien is a legal claim placed by a creditor on the vehicle due to an outstanding debt. The most common vehicle liens arise from financing agreements and disputes where a financial institution holds a security interest in the vehicle until the borrower fully repays the loan. These liens are typically noted on the vehicle title, indicating that there is a creditor with a legal claim to the vehicle until the debt is satisfied. Additionally, mechanics' liens may occur if the owner fails to pay for services or repairs and the service provider claims a right to the vehicle. When unresolved liens can complicate the sale or transfer of ownership. Further complicating the situation some liens may not appear on the vehicle title as presented by the seller during the sale process making it imperative for buyers to thoroughly investigate a vehicle's lien status before making a purchase.

 

Here's a simple how to guide that will help you investigate and confirm if a vehicle has a lien before making a purchase:

 

Vehicle Identification Number (VIN):

 

The first thing you will need to start your research is a Vehicle Identification Number or VIN for short. This unique code serves as the vehicle's fingerprint and is typically found on the dashboard near the windshield or in the driver's side door frame. It is recommended to document the VIN from one of the locations on the vehicle and cross-reference it with the VIN on the vehicle title or other relevant documents to ensure a matching identification number.

 

Check the Vehicle Title:

 

Examine the vehicle title carefully. A clear title with no third party/lien holder information displayed under the ownership fields indicates that the vehicle is owned outright while a title with a lien holder listed means that there is a financial interest in the vehicle. As you are examining the title be sure to check for title brands as a branded title such as “salvage” or “rebuilt” will indicate signs of prior catastrophic damage that was deemed by the insurance company as a total loss. Branded vehicles tend to have a higher diminished value as often they may exhibit signs or have other potential issues. Typically, it is advisable to avoid vehicles with branded titles. However, in some instances, there are enticing offers on well-reconditioned vehicles that might be challenging to resist. In such cases, it's crucial to have the vehicle thoroughly inspected by a qualified independent technician before finalizing the purchase.

 

Clear communication with the seller and if needed, legal advice can help navigate the process and ensure a secure and informed vehicle purchase. Be sure to ask the seller directly about any existing liens or entanglements.

 

If the title or the seller indicates a lien holder, the most prudent course of action is to consider walking away and exploring alternative vehicle options. However, discovering a lien on a vehicle doesn't necessarily mean you should always abandon the purchase. It's crucial to understand the nature of the lien including the outstanding amount and conditions for release. You can contact the lien holder directly to obtain information about the outstanding amount, payment status and the process for releasing the lien upon payment. This process tends to be more time-consuming and is generally not recommended for novice car buyers.

 

Check with your Local DMV:

 

Your local Department of Motor Vehicles (DMV) is an invaluable source of vehicle information. It is highly advised that you visit the DMV or equivalent agency in your area. Some jurisdictions allow individuals to request information on a vehicle by providing the VIN. They may even do a free lien checks on vehicle to help ensure that there are not buying into someone else’s legal entanglements. Some states also offer online tools to check for liens using just the VIN. So be sure to do your research as it greatly differs based on the region.   

 

Vehicle History Report:

 

Purchase a comprehensive vehicle history report from reputable provider such as VinCheckUp. VinCheckUp reports are compiled from information provided by NMVTIS, insurance agencies, DMV, vehicle recyclers and auction houses and are an invaluable source of vehicle history information.

 

VinCheckUp Vehicle History Reports may provide information on past sale and lien details, such as lien holder business name, contact details, dollar amounts, status and more…

 

Professional Vehicle Inspection:

 

You may choose to outsource this entire process by simply hiring a professional vehicle inspector. These experts can provide a thorough examination of the vehicles condition and will typically research vehicles legal ownership status and provide you with details related to possible liens or encumbrances.