Removing a Lien in Delaware

When you take out an auto loan, your lender—or lienholder—places a lien on your vehicle and is the actual car owner until you pay off the loan and have the lien removed. On this page, we’ll go into the specifics of what a lien is and how to remove one from your Delaware vehicle title.

What Is a DE Car Lien?

A car lien is a legal claim on a vehicle.

When a person or business loans you money to purchase a car, they place a lien on the vehicle and become the lienholder. Placing a lien on the vehicle protects them in case you don’t pay off the car loan.

Simply put, the lienholder is the vehicle’s legal owner until you pay off the loan. Once you pay off the loan, you can apply to have the lien removed and get a clear car title. At the end of the process, the lienholder will surrender the car title, making you the official owner of the vehicle.

Other Types of Liens

A car title lien is the most common type of auto lien, but there are other times when a lien might be placed on your vehicle. For example, a person or business might place a lien on your car in Delaware if you don’t pay for services like:

  • Mechanic work.
  • Towing or impound services.
  • Storage or warehouse services.

If you end up with one of these kinds of liens, talk with the person or business holding the lien and contact your local Delaware DMV office to learn more about your options.

Who Is a Lienholder in DE?

Your lienholder is the person or entity that issued your auto loan.

Most often, a lienholder is a bank or some other financial institution—but not always. Depending on how you obtained the money to purchase the car—say, you obtained a personal loan from someone—your lienholder could be an individual.

Generally, your lienholder keeps the car title until you pay off your auto loan, though in some cases, you may hold the title as long as it indicates the lienholder owns the car.

Removing a Lien on a Delaware Title

When you pay off your car loan, you can apply for a clear car title (i.e. have the lien and lienholder’s name removed from the title).

Once the loan is completely paid off, your lienholder will send you either a lien release letter (if you have the title) or the car title. Then, you can head to your nearest DMV office with:

  • The lien release letter or car title.
  • The current registration card.
  • Proof of car insurance.
  • Your valid DE driver’s license.
  • Payment for the $35 fee.

An agent will process the paperwork and issue you a clear car title.

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