Removing a Lien in Rhode Island

Most often, when you finance a vehicle, the lender will place a lien on your car title. This means the vehicle technically belongs to the lender (lienholder) until you completely pay off the auto loan. After that, the lien will be released and you can apply for a clear title with the Rhode Island Division of Motor Vehicles (DMV).

What Is a Car Lien in Rhode Island?

A car lien is a type of collateral for auto loan lenders.

When you take out a loan to buy a vehicle, placing a car lien on the vehicle title is a way for your lender—or lienholder—to financially protect themselves in the event you stop making payments.

Once you pay off your loan, your lienholder will release the lien and the car is officially yours.

Other Types of Liens

While car title liens associated with auto loans are the most common kinds, there are other types of liens people or businesses can place on your vehicle.

For example, you could have a lien placed on your title for failing to pay for vehicle services like repairs, storage, or towing. You might also use your car as collateral in a transaction, or even a divorce settlement, putting one party’s name as the lienholder until certain conditions are met.

With all the different situations in which a lien can be placed on your vehicle, the conditions of ownership and payment will depend on your individual circumstances. Talk to your lienholder and an RI DMV agent for details about your lien if it’s been instituted for a less common reason, like those named above.

Lienholders in Rhode Island

Simply put, your lienholder is the person or business that puts up the money (i.e. your car loan) for you to purchase the vehicle. Usually, these are banks or other financial institutions, but depending on how you purchased the car, your lienholder could be a car dealer or individual person as well.

Because the lienholder essentially paid for the car by issuing you a loan, the car technically belongs to them. Once you pay off the loan, the lienholder will release the car title and lien, making you the legal owner.

However, if you default on your payments your lienholder can repossess the vehicle, which could badly damage your credit.

RI Car Title Lien Release

The RI DMV doesn’t require you to apply for a new title after you satisfy your lien. To officially transfer vehicle ownership into your name, you just need to be in possession of:

  • The car title.
    • Your lienholder must sign off on the title, stating you satisfied the lien.
  • A letter of lien release.
    • You must attach this to the title.

However, you also have the option to apply for a brand new title, omitting any indication of lien history. To obtain one, head to the DMV’s headquarters in Cranston and present the following:

  • All required materials for a duplicate RI title.
  • The letter of lien release.
  • The $51.50 duplicate title fee.

Once everything’s processed, you’ll receive your clear vehicle title.

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