How to find out if a car is mortgaged
Buying a used car can be a daunting task. It takes a thorough search, test drives and a lot of legwork to find the right car. One step that should never be overlooked is looking for any title collateral. If you are…
Buying a used car can be a daunting task. It takes a thorough search, test drives and a lot of legwork to find the right car. One step that should never be overlooked is looking for any title collateral. If you make a mistake and a lien has been placed on the vehicle, you may wake up to find your new car has been impounded and there is little you can do about it.
The difference between car registration and car title is that title refers to the ownership of the car, informs the state that actually owns the vehicle, and lists any liens on the vehicle.
Registration, on the other hand, refers to license plates on a car. License plates generate revenue for the state and are usually paid to the state's DMV. The name usually does not contain registration or license plate information and should always be kept in a safe place. The registration, on the other hand, must be kept in the vehicle.
A car lien is the right of a credit company, bank, or other party to a vehicle in exchange for their assistance in paying for the vehicle. A good example of collateral is a car loan. In exchange for the money needed to buy the car, the bank places a deposit on the vehicle, which acts as a "guarantee" for the bank that you will repay the loan. If you fail to repay the loan, the bank has a legal right to the vehicle, which they will confiscate and sell to pay off your debt.
A lien may be applied to a vehicle by institutions other than banks or financial companies. If transport taxes or fees are not paid, the local government may seize the vehicle. Unfortunately, a lien can transfer to a new owner if the car is sold, so it's important to make sure there are no outstanding liens against it before buying a used car.
Here is a detailed description of how to make sure that the vehicle does not carry any liens.
Part 1 of 3: Study the Headline
Image: DMV Connecticut
Step 1: Review the Documents. The first thing to do is to study in detail all the documents related to the vehicle, especially the title and registration.
While the details in the title vary by state, it must include information regarding the current owner, past owners, and any current or past liens on the vehicle.
- FunctionsA: If you are buying a car from a private seller, ask for his ID to verify that he is indeed the person listed on the title.
Step 2: Get Additional Documents. Request additional documents if necessary. If the title shows that the vehicle was ever under a lien, ask the seller to provide proof that the lien was satisfied.
The seller must have a copy of the release of the bond, which is a legal document showing that the bond has been satisfied. The bond release may be listed in the title or as a separate document, depending on the state.
- A warningA: If you decide to buy a car that has had a lien on it, make sure you have all the lien release papers when the sale is completed as you will need them when you eventually sell the car.
Step 3: Match the VIN number. Obtain a VIN number from the vehicle and verify that it matches all documents attached to the vehicle, including registration, title, and any release documents.
The VIN number can be found on a small metal plate on the dashboard of the car on the driver's side. This is a 17 digit number that contains both numbers and letters. If the VIN number is missing, incomplete, or does not match the number in the vehicle's documentation, do not purchase the vehicle.
A warningA: The seller of any vehicle must collect all these documents and prepare them for review. If they don't have a copy of the title deed, current registration, or detention release, don't proceed with the sale until they can provide all of those documents. If they don't seem willing to provide them, there's a good chance they don't have clear ownership of the car and you should move to another car.
Part 2 of 3: Check the VIN
If you have a VIN number, there are a number of sources that allow you to check the VIN online, which will alert you to any vehicle entitlement, as well as provide you with a history of that vehicle, such as if it has ever been in an accident. . It is recommended that you pull the vehicle history on any vehicle you are seriously considering.
Step 1: Get a VIN Number. Remove the VIN number from your vehicle. This will allow you to do an online check of the liens and the overall history of the vehicle.
Step 2Use Header Checker. Go to your state's DMV website and see if they have a header checking feature.
It depends on the state, but most have this feature. This allows you to enter the VIN number of any vehicle you are considering and it will output the title information in the entry. You should be able to determine if the car has a lien.
If the title appears as clear, you are ready to buy; if it says the vehicle is under bail, you will need to go back to the seller and ask for more information.
Step 2: Use the header check feature. Go to your state's DMV website and see if they have a feature that checks headers.
This allows you to enter the VIN number of any vehicle you are considering and displays the title and hold information. You may need to visit your local DMV office if your state does not offer online access.
If the title appears as clear, you are ready to buy; however, if it says the vehicle is under bail, you will need to go back to the seller and ask for more information. There are a few things to keep in mind:
Errors or delays happen with DMVs. If the seller claims to have paid the bond, but the vehicle title still indicates the bond, the DMV may not have been properly notified that the bond was paid.
The seller should be able to resolve this issue by contacting the DMV with proof of the bond release. There may be a fee for this, which the seller must pay.
If the seller has lost the withholding waiver, they will need to return to the bank or financial institution to get a copy and bring it to the DMV.
Step 2: Get a Vehicle Report. Use sites like CarFax, AutoCheck or CarProof to get a vehicle report.
While this option is not free, it will not only get you out of lien problems, but it can also alert you to vehicle-related recalls, as well as the fact that the vehicle has ever been in an accident.
- AttentionA: Fees vary by site.
Step 3: Visit the DMV. If your local DMV does not provide online access to the titles, you can visit their local office and request a title report.
This report will contain property retention information and will, in most cases, alert you to any accidents the vehicle has been involved in. There is usually a small fee, but it varies by state.
Errors or delays happen with DMVs. If the seller claims to have paid the bond, but the vehicle title still indicates the bond, the DMV may not have been properly notified that the bond was paid.
The seller should be able to resolve this issue by contacting the DMV office with proof of the release of the lien to correct the title. There may be a fee for this, which the seller will have to pay.
It is also possible that the seller has lost the release payment. If so, they will need to go back to the bank or financial institution to get a copy and bring it to the DMV.
- A warningA: Do not complete the purchase of a vehicle until you have free and clear ownership of the vehicle. Even if the seller has proof of a lien release, until the DMV puts it on the title, you won't own the car for free. You are responsible for the hassle and fees associated with contacting the DMV to correct any errors in the header.
Part 3 of 3: Bail Release
No matter how you look for a lien, if one comes up it will need to be dealt with before buying a car. Never buy a vehicle with active liens against it. All security interests must be satisfied before the purchase is completed.
If you are the seller of a vehicle with a lien, or you have purchased a vehicle that you later discover has been seized, it is very important to remove the lien.
Step 1: Allow a deposit. If the vehicle has a legal lien, the only way to remove it is to pay the lien.
If you are a car dealer, contact the deposit holder, get the correct payout amount and pay off the deposit. The lien holder must cancel the lien and send a copy of the lien release to you and the DMV, which must be marked on the title deed of the vehicle, giving you free and clear title to it.
If you purchased a vehicle that is subject to a deposit, contact the seller and ask them to fix the problem. If they refuse, the only option may be to pay on their own.
A warning: Failure to honor a lien may result in your vehicle being impounded by the lien holder, which is within their legal rights.
A warningA: Depending on the payment method, there may be a waiting period for the release of the deposit. If payment were made by check, the financial institution would typically wait until the check was cleared. This may take up to 2 weeks depending on the circumstances.
Step 2: Visit the DMV. Go to the DMV office to show proof of bond release.
The DMV must remove the lien and transfer it to you if you are the vehicle buyer.
- AttentionA: Most states charge a fee for this service.
Verifying that a used car is free of any deposit before the sale is completed is one of the most important steps in the car buying process. This will prevent the serious inconvenience of impounding your car and give you the peace of mind knowing that the car is completely yours. Once you've established that the title is clean, don't forget to check the rest of the car. One of AvtoTachki's mobile mechanics will be happy to come to your home or place of work to carry out a preliminary inspection of the vehicle to make sure it is in good working condition.
