Should You Check Lien On Cars Before Buying Them?

When buying a car — especially a used car — it’s vital that you do your due diligence to make sure you’re not buying a lemon. One of the best ways to do that is to look into the vehicle’s history. Not only do you want to keep an eye out for accidents, insurance claims, and a good service history, but you should also check for a lien on any car you’re intending to buy.

Checking for a lien can help protect you from ending up on the hook for the previous owner’s behavior. Using our free VIN checker tool, you can quickly and easily find out whether there is a lien on any car you’re thinking of buying. That way, you can make your purchase with more confidence and know that you won’t be liable for somebody else’s debt.

What Is A Lien?

A lien is essentially a form of security interest granted over an item of property to secure the payment of a debt or performance of some other obligation. In other words, it’s when a creditor claims ownership rights to your car until you’ve paid off whatever debt they’re owed — meaning you may not be able to sell the vehicle without paying them first.

It’s important that you check for liens on cars before purchasing so you know exactly what you’re getting into with any prospective purchase. If you buy a car with a lien held against it, the creditor may come after you for repayment of the debt they are owed.

Why You Should Check For A Lien On A Car

Checking for liens on a car protects you from getting stuck with somebody else’s debt. It also helps to avoid the possibility of the creditors coming after you for the debt they are owed — potentially leading to repossession or other legal action against you.

By checking for a lien on any car before purchase, you can save yourself time and money in the long run by ensuring that there won’t be any surprises waiting down the line.

Having a lien against vehicle affect your insurance, costing you even more money.

Ultimately, checking out a car thoroughly is important no matter what type of vehicle you’re buying — but when it comes to liens, it’s absolutely essential.

Who Can Hold A Lien On A Car?

A bank, lender, or other financial institution may hold a lien on a car. Liens can also be held by individuals and companies — such as mechanics — who have provided goods or services to the vehicle owner that were not paid for.

It’s important to note that liens are typically attached to cars in the form of a document which must be released once the debt has been satisfied. If you’re buying a car with a lien against it, make sure to double-check that all documents have been released before transferring ownership of the vehicle and any associated funds.

Buying a car without checking for liens is risky and could end up costing you more money if you don’t do your due diligence beforehand.

How To Find Out If There Is A Lien On A Car

An honest seller will tell you if there is a lien held against the car before they sell it to you. Unfortunately, sellers aren’t always honest. Plus, they don’t necessarily have to be dishonest to not tell you about any liens. It’s possible to forget you even have a lien against the car.

But whether it’s dishonesty or forgetfulness, you can’t rely on a seller to tell you about any liens issued against the car. The only way to be sure is to check for yourself.

Every provincial licensing authority has its own service where you can check the VIN of a car for any liens. The Government of British Columbia has a lien search here, and Ontario’s is here. In some other provinces, such as Alberta, you’ll need to go through a licensed registry agent to perform a lien search. In some provinces, the search is free, while in others, there may be a charge.

Alternatively, you can run the VIN of any vehicle through our free checker tool, which will tell you if the car has any liens held against it. It will also tell you lots more helpful information about the car, such as any accidents it has been in, its ownership history, factory recalls, and more.

It’s estimated that something like 40 to 50% of Canadian vehicles currently have liens on them, so any used car you look at could likely have a lien held against it. That’s why it’s so important to check a car’s history before any money changes hands.

How To Get Rid Of A Lien On A Car

Fortunately, having a lien held against a car isn’t the end of the world. To get the lien removed, all a car owner has to do is pay off the debt they owe to whoever issued the lien in the first place. Once they’ve done that, the creditor must then issue a lien release to the car owner.

The lien release is proof that the debt has been paid, and it’s usually necessary to transfer ownership of the vehicle. If you’re buying a used car with a lien against it, make sure you get your hands on this document before you are willing to pay for it. Otherwise, you may find yourself stuck with someone else’s debt!

It’s important to remember that liens can linger after a loan has been paid off or service has been rendered, so it’s always best to check for liens before making a car purchase. Once the lien has been released, you can run another check to make sure it shows up as paid. However, be aware that it can take some time for government agencies to update their records and show that a lien has been released.

What You Should Do If There Is A Lien On A Car You Want To Buy

If you find a car you want to buy has a lien held against it, there are a few options open to you:

• Walk away. This is certainly the simplest and easiest option, and it will protect you from paying somebody else’s debt. However, so many used vehicles have liens against them that this may not always be a practical option. If it’s the perfect car or a really good deal, you may want to try other options.
• Insist the seller pay off the lien. Depending on the amount of the lien, this can be a tricky situation, as not all sellers will have the money to pay off the lien. It’s also possible they may try and pass it on to you, so make sure you get something in writing that confirms they are paying for it before handing over any cash.
• Take out a loan to cover the cost of the lien. If you’re determined to buy a car with a lien against it, you can take out another loan (or use your own funds) to pay off the debt and obtain a lien release. This option only works if you have enough money available or can qualify for another loan. If none of these options work out, don’t be afraid to walk away and look at other cars.

Protecting Yourself From Cars With Liens

Liens are a very common part of buying a used car, and if you look at more than a few used cars, chances are good you’ll find one or two that have liens held against them. Fortunately, it doesn’t have to be the end of the world.

Knowing a car has a lien against it can help you decide whether or not you want to buy it, and can also help you negotiate the price. Remember, if you’re going to have to pay off the seller’s debt yourself, that should be reflected in the price you pay for the car.

Whatever you decide, the more you know, the better your position will be. Make sure to use our free VIN checker tool below to check for a lien on a car before you make any big purchase decisions.

FAQs

Is it illegal to sell a car with a lien on it in Canada?

No. Registered dealers are required to remove any liens from a car before they sell it, but the same is not true of private sellers. That’s why it’s important to check for liens before you buy.

Can I get a lien on my car?

Yes, it’s possible to have a lien placed on your vehicle if you don’t pay a debt. For example, if you fail to make loan payments or owe money to the government in taxes, they may place a lien on your car. It’s important to know that liens can be very difficult and expensive to remove once they’re in place.

What happens if I buy a car with a lien without knowing it?

If you purchase a vehicle unknowingly with an active lien against it, then technically the seller still owns the vehicle and can reclaim it from you at any time. You can avoid this unfortunate occurrence by checking to make sure there are no liens on any vehicle before you buy it.