When you’re in a good financial situation and have the ability to lend someone five dollars or even twenty bucks, you may not stress about it too much. You’re probably not going to require them to sign a contract or do anything that legally binds them to the five or twenty dollars that they owe you. 

However, when it comes to more significant amounts, the same rules typically don’t apply. When you start lending tens of thousands—or hundreds of thousands—of dollars to people, you usually want something in writing that ensures you’ll get your money back or have the opportunity to take action if you don’t. 

Of course, this scenario can play out in your personal or professional life, but it’s especially prevalent in the auto industry. It doesn’t matter if you’re a private lender or a salesperson at a dealership. If you’re providing money to help someone purchase a vehicle, you want to protect yourself in case the individual defaults on their loan, which means you need to post an auto lien. 

A lien is basically an insurance policy that protects you as the lender. Merriam-Webster dictionary explains it as “a charge upon real or personal property for the satisfaction of some debt or duty ordinarily arising by operation of law.” 

Keeping that in mind, when it comes to an auto lien, you have the right to a person’s vehicle until they pay off their debt to you. Having this ownership means you get to keep the car title in your name and possession. Additionally, if the borrower defaults on their loan, a creditor can repossess the car, taking it away from the driver completely.   

When you post an auto lien on a vehicle, it’s considered a voluntary lien. By falling into this category, the borrower is agreeing to the contract and giving you the right to their property if they fail to meet the obligations in the deal. 

However, one car can have multiple liens on it. These types of liens show up for various reasons and typically fall into the “involuntary” category. For example, a borrower may have these additional liens on their vehicle: 

• Judgment liens: This lien occurs when a creditor thinks it’s time to take a borrower to court for failing to pay on their loan. These liens are court-ordered. 
• Mechanics liens: If a borrower doesn’t pay for a specific service, a mechanics loan will likely appear on the car title. 
• Tax liens: The Internal Revenue Services (IRS) will place a tax lien on a borrower’s property if the person fails to pay taxes on their car. When this happens, the IRS has the right to liquidate a borrower’s assets, including the motor vehicle, to recover what the person owes the government. 

If you’re working with a reliable borrower, these involuntary liens will most likely not show up. But it’s still good to know which liens might appear on a vehicle if your borrower isn’t making their necessary payments. 

Can someone sell a car with a lien on it? 

Even though you post a lien on a vehicle, your borrower can sell the car with your expressed permission. Providing this wiggle room will not disadvantage you since you have the first right to any money that comes from the sale. 

For example, maybe the borrower sells the car for $10,000, the exact amount they still owe you. In this case, you’ll get every penny from that transaction. The borrower will only walk away debt-free. 

However, perhaps the borrower sells the car for $20,000. In this scenario, you’ll still receive the $10,000 that they owe. But the borrower will get to keep the other half of the profits. Most likely, you’ll receive one check, and the borrower will receive another. 

Additionally, if the borrower pays off their debt by selling the car, your next step is to remove the lien. Then, you’ll need to transfer the title to the new buyer.

When it’s time to place an auto lien on a vehicle, there are two paths that you can take. The first is the most obvious: go to the Department of Motor Vehicles Services (DMV) for help. 

You can visit the DMV’s website to find an office that’s near you. All you have to do is type in your city, state, or zip code, and the DMV will pull up its most suitable locations.

From there, you need to drive to the DMV and fill out some paperwork. A representative will give you a title application, which will ask you to provide personal information, vehicle information, and details regarding your lien. After you fill everything out, you just need to submit the application and pay a fee, which varies state by state. 

Overall, this process is nothing new, but it’s still long and time-consuming. It requires back-and-forth, physical paperwork, frustrating wait times, and multiple trips to the DMV if you need to provide more information for your auto lien. 

Of course, if you have an abundance of patience and plenty of time on your hands, this process may not seem too difficult. But if you’re someone who wants a quicker solution, you need to consider the second path to posting an auto lien. 

For a more efficient way to post an auto lien, you should use a transportation agency with online services. For example, companies like Barry Risk Management do the same things as the DMV, but their representatives help customers online. 

If you want to post an auto lien through Barry Risk Management, you don’t have to drive to a specific location or fill out any physical paperwork. Instead, all you have to do is contact a representative and provide the information they need. Then, they’ll create the auto lien for you. 

It’s that simple. 

There are no long wait times or constant back-and-forth. With a transportation agency like Barry Risk Management, you can get things done quickly and efficiently. It also helps that Barry Risk Management has over 30 years of experience in the DMV industry, so you’ll be working with an experienced team of professionals who know how to help, regardless of the state that you call home. 

Call 1-888-995-TAGS(8247) to speak with a representative from Barry Risk Management to put an auto lien on a car!