A car lien can be likened to an insurance policy which helps to protect a creditor even if the borrower defaults. This simply means that ownership of the vehicle is transferred to the loan provider in the form of the car title pending when the borrower repays the loan. This gives the lender the right to repossess your vehicle once you are unable to pay back what is borrowed. Liens simply serve as proof that your car is the collateral for the loan.
A lien can be put on your vehicle if you currently owe and are making no attempt to pay off the loan. This basically means that the holder of the lien has to be paid first on selling the car. Let's say that your vehicle is to be sold for 18000 dollars. If a lien of $9000 is put on your vehicle by the debt collector, the debt collector would have the second lien if your vehicle gets refinanced by another company.
Your credit history will suffer a huge negative impact once your vehicle is repossessed. The only time where a lien will be such a great idea is if you are searching for ways to get your credit record back on track since refinancing usually comes with lesser interest rates.
When trying to buy a vehicle, it is best to work with a credible dealer but if you decide to work with a third party, be very careful and thoroughly analyze the vehicle’s paperwork to ensure that it has no liens whatsoever.
Conclusion
Vehicles with liens can still be sold but the lien holder must be first paid. This will then see ownership transferred to the buyer.
Learn how to access a car title loan without a clear title at https://www.supermoney.com/2018/01/get-auto-equity-loan-without-clear-title/
