Removing a Lien in California
If you financed your car and are still paying off your car loans, there may be a lien on your car title. That means, in the eyes of the law, you are not the legal car owner.
Once you've finished paying off your car loans, you will be able to get the lien removed. Then you can apply for a new title with the California Department of Motor Vehicles with the lienholder's name removed from the title.
What Is a CA Car Lien?
A lien is essentially a type of collateral used by a property owner. It protects a property owner against any chance that the property buyer will default on or cease to make their payments.
A lien on a California car title is an aspect of a car loan. Should the buyer of the car be unable to continue making payments on the loan, the lien will allow for the lienholder to repossess the vehicle.
Other Types of Liens in California
Aside from acquiring a lien on a car title when you take out a car loan, there are several other instances when a lien may be placed on your car in California, including when a person has not been paid for:
- Repairing the vehicle.
- Furnishing supplies or materials for the car.
- Towing the car.
- Storing the car.
In these cases, the car may be sold in order to pay for the services. The California DMV will contact the registered and legal owners of record in these cases with more information.
Who Is a Lienholder in CA?
In the case of a car title lien associated with an auto loan, the person or entity responsible for writing your car loan is the lienholder. Oftentimes, a lienholder on a car title will be a bank, credit union, or financial firm.
If a lien is being held on a title for unpaid services, the person or entity owed the money will hold the lien.
The name of the lienholder will be on the car title and the title will be in their possession until all of the car loan payments have been made.
Removing a Lien on a California Title
When all the payments have been made on your vehicle, the lienholder will mail you a signed vehicle title indicating the release of the lien from your car.
Within 30 days of receiving the title, send it to the DMV, along with a $15 transfer fee, to get a new title issued in your name. Mail to:
Department of Motor Vehicles
Vehicle Registration Operations
P.O. Box 942869
Sacramento, CA 94269
If you need to contact your lienholder for more information and have trouble finding them, you can access their contact information from the DMV's Financial Institution Listing. The listing also has detailed instructions for steps to take if your lienholder is not in listings.
If your lienholder is in the DMV's electronic lien system, your lien-free title will be directly mailed to you once the DMV is notified that the loan has been satisfied.
Removing Liens from Missing Titles
You will need to follow a different process to obtain your new California title if your previous title was:
- Not received before removing the lienholder.
For cars 2 model years old and newer, you will need to submit:
- A completed Application for Duplicate or Paperless Title (Form REG 227).
- Someone with knowledge of the misplacement or damage of the title must complete the “Missing Title Statement of Facts" section.
- The original title, if marking “illegible or damaged" as your reason for a duplicate title.
- Payment for the $23 duplicate title fee.
The new title will be sent to the lienholder, who is then responsible for releasing the lien and forwarding the title to you.
For cars 3 model years old or older, you will need to complete all of the above, PLUS the following:
- The lienholder's signature must be notarized on the duplicate title application.
- You can submit a notarized Lien Satisfied/Title Holder Release (Form REG 166) in lieu of the lienholder's notarized signature on the duplicate title application.
- Pay an additional $15 transfer fee.
A new Certificate of Title will then be issued directly to you.
- REG 227
- Application For Duplicate or Paperless Title
- Complete this form to request a duplicate CA title OR paperless title, which you can use while transferring ownership of a vehicle.