Removing a Lien in New Mexico

If you financed your car purchase in New Mexico and are still in the process of paying off your car loan, there is most likely a lien on your car title. That means your car does not technically belong to you, in the eyes of the law. Once you've finished paying off your car loan, you can have the lien removed from your title in New Mexico through the Motor Vehicle Division (MVD).

What Is a Lien?

A lien is a way for a property owner or service provider to insure themselves against losing out on money that is owed to them. It's a form of collateral.

In the case of your car title, a lien allows for a lienholder in New Mexico to repossess the car, should you default on or cease to make payments toward your car loan.

Types of Liens in New Mexico

While car title liens are common in New Mexico, the state allows for other types of liens to be placed on your vehicle, including:

  • Towing liens.
  • Mechanic's liens.
  • Storage liens.
  • Landlord liens.
  • Abandoned vehicle liens.

In some of these cases, the car in question may be sold at public auction in New Mexico in order to settle the debt. The car owner must be notified of the plans to sell the vehicle before the auction takes place.

Who Is a NM Lienholder?

A lienholder is typically the person or company at risk of losing out financially, in the event that the buyer is unable to pay in full. In the case of your car title, the lienholder is the business or individual responsible for writing the car loan—typically a bank, credit union, or other lending institution.

In New Mexico, a lienholder will typically be in possession of the car title until you have satisfied the car loan.

Removing New Mexico Title Liens

Once you have paid off the loan on your car, your lender needs to send you the vehicle title indicating that it's clear from all liens against it.

Contact your lienholder and ask them to do one of the following:

  • Send you a notarized release of lien on their company letterhead.
  • Sign the “Release of Lien" section provided on your vehicle title.
    OR
  • Complete and sign a Release of Lien (Form MVD-10041).

Bring the applicable document to your local New Mexico Motor Vehicle Division office, along with payment for titling fees.

Forms

MVD-10041
Release of Lien
Use this form to release a lien on a NM vehicle title once it's been satisfied.

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