Removing a Lien in Utah
If you borrowed money to buy a car in Utah and haven’t paid back the auto loan yet, chances are there’s a lien on your car and your lender—or lienholder—is listed on the car title. Once you pay off your loan, you can have the lien removed and apply for a clean title with the Utah Division of Motor Vehicles (DMV).
What Is a Utah Car Lien?
Liens are legal agreements or security interests a person or business—usually a loan lender, service provider, or property owner—secures to protect their financial contributions. Liens give these people or companies—known as the lienholders—the right to take legal action if they don’t receive payment for their loans or services.
So, a car lien is a legal agreement or security interest a lender places on your car title after issuing an auto loan. The lien gives them ownership of the vehicle and the right to make certain decisions, like how much auto insurance you’ll be required to buy.
Once you pay off the loan you can have the lien released and become the sole owner.
Other Types of Liens
Auto loan lenders aren’t the only ones who can put a lien on your car. Sometimes, you could have a car lien as a result of:
- Using your car title as collateral in a transaction.
- Failing to pay for vehicle-related services like repairs or towing.
- Negotiations in a divorce settlement.
Because these situations are specific to each person and circumstance, you need to talk to the lienholder and a UT DMV agent to find out how—if possible—you can remove the lien.
Who Are Lienholders in UT?
Lienholders are the people or businesses that issue car loans.
The most common lienholders are banks, credit unions, and other financial institutions; however, sometimes car dealerships or even individual people issue loans for vehicles, making them lienholders as well.
Generally, lienholders keep your car title until you pay the loan in full and have the lien released. They’re considered the actual owners of the vehicles and they can even repossess the vehicles if you don’t pay back the loan.
Remove a UT Car Title Lien
Once you satisfy your lien (i.e. finish paying off the loan), your lender will send you the properly completed car title and, usually, a lien release statement.
Then, you can apply for a clear title (i.e. without the lienholder’s name) with the UT DMV by submitting:
- The car title, completed by both you AND the lienholder.
- Lienholder marks that you’ve satisfied the lien and you mark that you’re requesting a new title without the lienholder’s name.
- The lien release statement.
- A completed Vehicle Application for Utah Title (Form TC-656) IF you need to change an owner’s name (e.g. following a marriage or divorce).
- Payment for the $6 lien release fee.
Apply in person at your local DMV office or by mail at:
Utah State Tax Commission
Division of Motor Vehicles
P.O. Box 30412
Salt Lake City, UT 84130