When the purchase of a car is financed by a bank, the title will show the lender as the lien holder. Being listed as a lien holder protects the lender from having the car sold and transferred to another owner before the balance due on the loan is paid in full. Once the loan has been satisfied and there are no risks to the lender if the car is sold, the listing as a lien holder can be removed and the owner of the vehicle can take physical possession of the title.
Choosing the Best Way to Get the Title
Selecting the best way to obtain the title to your vehicle will depend on your proximity to the office of the lender and to the nearest office of your state's department of motor vehicles. Other factors may include whether you need to get the certificate of title as quickly as possible to facilitate a sale of the vehicle or are just staying on top of your record keeping and can wait a short while before getting it in the mail.
Titles and the Electronic Lien and Title System
The Electronic Lien and Title System stores and transmits title information in a digital format, relieving the users of the system, including state DMV offices and lenders around the country, from being required to warehouse and mail vehicle titles. If your lien holder and state DMV participate in the ELT program, when the lender receives the final payment and the loan has been satisfied, an electronic release of the lien will be transmitted to the DMV, which will take the lien holder off the title and send a hard copy of the certificate of title to you.
Getting a Title from a Non-ELT Lender
As might be expected, obtaining a title from a lien holder that does not maintain electronic titles will take longer as the paper title will have to be pulled from storage and signed to release the lien. Generally speaking, getting the signed title out to the vehicle owner after the final payment has been made is done on a “best efforts” basis, which can take up to 30 days. If you’re in a rush, take the released title to a DMV office after you receive it to do the transfer on the spot. If you’re not pressed for time, you may be able to mail the paperwork to the DMV, which will mail the modified title back to you.
Go to the Lender’s Office
If you’re selling the car, the buyer will likely demand a clean title, which means that the lien holder will have to be removed before the sale can take place. To get the title quickly, you may be able to go to an office of the lender with the buyer to make the final payment and get a copy of the title. This is an efficient way to close out the loan, get the lien off of the title, get paid for the vehicle and transfer ownership to the buyer.
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