The Expert Podcast

Today we're going to answer some common questions about liens on vehicles and on cars versus how can you tell if there's a lien on a car we're going to talk about Can a bank revoke a lien on a car after the contract is signed And then also what if there's a lien on a vehicle from a third party Other than somebody you borrowed money from How does that work What if it's a lien from before you bought it from a dealer from another owner So first let's take a look at how to tell If there's a lien on a vehicle First way to find out is look at the title You should be getting a title certificate When you purchase a vehicle and that title certificate Is a legal document issued by government agency It will list who was the owner of that vehicle It will list who is the lien holder on that vehicle If there is one And they'll have the VIN number Year make model and all the other details Mileage in many cases color What date the title was issued and that's going to be an important factor Because if you look at that title and it shows no lien on the vehicle You should be okay because there's probably not a lien However Here's the scenario where there could be a lien on a vehicle Even if it doesn't show up on the title And that comes from if that title Is not the most current issued document Why would that be well Suppose that I am an unscrupulous car seller And I have a vehicle that I want to sell you And I have the title for that vehicle And has no lien on it
So what I do is I go down to the department of motor vehicles and I request that they give me A duplicate title of replacement title I tell them look I lost my title certificate
Then what I do is I take that new title certificate that I just got issued today And I go to a bank or I go to a title loan or a title pawn And I tell him I want to borrow money against my car I'll give you a lien on my car And they lend me money whether it's you know a bank or a credit union or a title pawn and they take my title
And they file it with the DMV saying there's a lien on this car
'cause I signed all the paperwork And now they put a lien on the vehicle and they take the title from me So I now I have that cash Maybe I borrowed 5,000 10,000 whatever it is Now I take that car and I put it for sale Craigslist Facebook Autotrader wherever I put it And I try to sell it and you come along and say Hey I want to buy your car Well now I take out that old title That I said that I lost And it says no lien And I take your money And I give you my title and I signed it over and you go away
Now what happens when you go to try to register or title that vehicle you take that title it's signed over to you You go to DMV and they say Hey I just bought this car Here's my title Give me a new one with my name on it Not so fast
The DMV is going to say wait there's a lien on this vehicle Well I have my title Yeah but that's not the current title That's an old title It's been revoked It's been superseded by a new one that has a lien
And how would you know that Well unless you took the extra time to look at the date on that title and then check with the DMV to see that it's the most current one you would never know Or unless you did the transaction at the DMV where they could look it up you would never know It's pretty rare That happens But that is a scenario that you could have a lien Now what if there is a lien on the vehicle How do you get it off Well First you have to find out is the loan paid off or is it not paid off because many times alone is paid By the borrower Zero balance but the bank just never takes it off The title record They just too lazy to do it or they don't want to spend the money So if you just contact the bank tell them look I have this title I want you to take the lien off They'll look it up make sure it's paid Boom they'll take it off And there's a way to do that You can get more information about our website What about one that's not paid off Well that's a little trickier
Because banks normally don't take liens off of titles If they still have money coming to them if somebody owes them money That's the reason for putting the lien on a title So they get their money So they may be less likely to do it Although there are some ways to do that too especially If you're not the person to borrow the money if you're innocent third party Sometimes you can Get that lien taken off now What about the question is can a bank revoke a loan on a car after you signed the paperwork Let's say you go to a dealership You buy a car They tell you about the loan It's going to be $442 a month You signed the papers They give you the keys you take the car and you drive away What if that dealer calls you up A week later two weeks later it says Hey your loan It's canceled You gotta bring the car back Can they do that Well they probably can And here's why Now remember in this case you might want to get legal advice We're not attorneys we're not giving you legal advice So you might want to check with an attorney But when you buy a car from a dealer A lot of times without you really knowing they'll make you sign what's called a bailment agreement What that means is that Your loan Looks like it's going to be approved but it's not completely done with the bank yet So we'll let you take the car You signed all the papers We'll take care of the loan paperwork Ourself And don't worry about it's all behind the scenes but if in some Set of circumstances the bank doesn't accept your loan You got to bring the car back Why wouldn't they accept it Well maybe The dealership guessed that your credit was good enough but maybe it's not maybe your income didn't verify Maybe you put something on the application that wasn't true Maybe the dealer puts something on your application that wasn't true Maybe that bank changed their policy And the dealer didn't know about it Maybe you didn't put insurance on the vehicle There's a lot of things that can happen that would keep the bank from accepting that loan until they accept the loan and send you a payment book That loan technically may not be approved and you're probably have signed paperwork at the dealer that says that they have the right to rescind the contract If their bank doesn't accept your loan Sometimes people won't want to even take the car unless they know for sure the loan is approved That's up to you What happens if there's a lien on a vehicle from a third party Well how could that be Well sometimes when cars are Sold at a dealership The dealership might have its own lien on the vehicle They might borrow money For their inventory So if there's 500 or 600 cars on a dealer's lot You might be talking $10 million worth of vehicles
The dealer a lot of times we'll get a loan A line of credit for all those cars on the lot And the bank holds the title
And then the dealership pays off each car as they sell it to you or another consumer Sometimes they get a loan from an auction when they buy cars from an auction So there may be an Unrecorded hidden lien on that car That normally gets paid off right away when you buy the car But what if the dealer drags their feet they go out of business They don't pay off the lien right away You could get hung up And you could be caught in the middle between two competing parties
So hopefully that answers your questions about liens If you have other questions put them in the comments below We'll give you more details You can also email our help desk help@cartitles.com is the email Glad to be of assistance And we'll see you on the next video