Checking For Liens Before Buying A Used Car
If you are in search of used cars for sale, check for any outstanding liens (claims) on the car first. You don't want to buy a car that the owner used to get a loan or whose purchase loan is still outstanding.
Methods for Checking Liens
Here are some easy methods to check for liens on a car.
Vehicle History Report
You can use the Vehicle History Report (VHR) to find out if there are any claims on the car. According to usnews.com, the (VHR) gives critical car details such as the status of the title, mileage, and accident history, among other things. A number of car-related websites offer VHRs for free or for a small fee. You just need a car's VIN (vehicle identification number) to get the VHR.
DMV
Your state's department of motor vehicles (DMV) can also help you unearth liens on your prospective purchases. Most states maintain websites where people can check car-related information, including outstanding liens. You will need some identification information on the car, such as the VIN, year, and make and model of the car. Here is an example of such a site for New York State.
Title Certificate
A car's title certificate is a legal document that identification and ownership details of a car. The specific information you will find on the title certificate includes the make and model of the car, the VIN number, as well as the name of the owner (or owners). The title will also list all lienholders on the car to protect the lienholder's interests. Thus, you can check lien information by reading the car's title.
Note that in some states, the car's title remains with the lender until the buyer clears the lone. Thus, the absence of the title might point to an outstanding lien, but you should confirm via other methods.
Financier
If you are buying the car on loan, then your financier can also help you check for outstanding liens. You just need to provide the car's VIN to the financier for the check. Note that the financer also has an interest in ensuring you purchase a car with a clear title.
Buying a Car with a Lien
If you do find that the car has a lien, the seller should clear the lien so you can buy the car with a clear title. Here are some ways the seller can do this:
- The seller can allow you to use some of the purchase money to clear the lien. In this case, you pay the outstanding amount directly to the financier.
- The seller can clear the lien with the financier.
- The seller can refinance the car loan so that the car is no longer its collateral.
Whatever you do, ensure the seller clears the lien before you finalize the car's purchase. You won't be able to transfer the title to your name if you buy the car with an outstanding lien.