Is It Hard To Sell My Car With A Lien?

Changing life circumstances can mean you need to sell your car before it is completely paid off. To permit the transfer of the title with a lien, the debt currently on the vehicle needs to be settled. The lien-holder simply will not release the car title until that debt is paid. There are numerous ways to go about settling a lien to enable a sale. Check with your financial institution that holds the lien for any company or area specific information that may be pertinent.

The automobile will be difficult if not impossible to sell with a lien still on it. There are some states that permit title transfer while a lien is present but most do not. Finding a buyer that will accept the circumstances of the unpaid lien is not likely to happen. Essentially, the lien-holder will be responsible for the payments. If not made, the vehicle will still be repossessed as per the original agreement leaving the buyer without their money or automobile.

Satisfying the Lien

There are a few common ways to satisfy a lien before selling an automobile. The most obvious is to simply pay it off ahead of time. This could be done by drawing from another financial source such as home equity.

Other methods may be available through the lien holder. Some will accept the total payment on the vehicle from the buyer and then send you a check for the difference. This option may be preferable for a seller that does not want their buyer to know exactly how much is left on the lien for whatever reason.

A buyer may also be able to write a check to the lien-holder for the amount and a check for the difference to the seller. Ultimately, this will entirely depend on the financial institution being dealt with at the time.

Retrieving the Title

Once the lien is satisfied, the title will be released as well as a letter of lien release. If a lien is listed on a title that the buyer is providing ensure they have a lien release from the lender. If they do not have a lien release to provide with the vehicle then do not purchase the automobile.

A vehicle with an active lien on it will generally not be able to be sold. Ownership of the vehicle is nontransferable to ensure the lending institution gets the money it is due. However, satisfying the requirements of a lien or selling a car with a lien is not an overly complicated matter.

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