How to Buy a Car With a Lien on It

Many drivers finance the purchase of their vehicles, but the associated lien on the car can create some hurdles if an owner decides to sell before the loan is paid off. It is possible to purchase a car with a lien on it, though, and the process is surprisingly easy.

Instructions

1

Identify the lien holder. Finding out who holds the lien is usually as simple as asking the seller who holds the financing for the vehicle, though some sellers may not know. If the seller does not know who holds the lien on the car, he may have to consult his payment book or financing documentation to determine what company actually services the car loan.

2

Approach the lien holder to determine how the transfer of ownership should take place. If you will be paying cash for the vehicle, the process may be quite simple, though transferring the title to a new lien holder may have to occur if you will also be financing the purchase.

3

Pay for the car. If you will be paying cash for the car, you can simply pay the lien holder the loan payoff amount and pay the balance to the seller. If you will be financing the purchase, the financial institution that funds your loan will handle the payoff of the institution and transfer of the lien to its company holding.

4

Register the car, but wait for the title. When you pay off the seller's loan, the lien holder may need some time to process the payment and send you the title (in some cases, this process can take up to a few weeks). For interim registration purposes, the seller should provide a bill of sale with lien holder contact information; your state's Department of Motor Vehicles (DMV) will use this information to verify the transfer of ownership and register your new vehicle.