![]() However, if you default on your payments your lienholder can repossess the vehicle, which could badly damage your credit. Once you pay off the loan, the lienholder will release the car title and lien, making you the legal owner. 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.īecause the lienholder essentially paid for the car by issuing you a loan, the car technically belongs to them. your car loan) for you to purchase the vehicle. Simply put, your lienholder is the person or business that puts up the money (i.e. 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. 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. 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. ![]() 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.įor example, you could have a lien placed on your title for failing to pay for vehicle services like repairs, storage, or towing. Once you pay off your loan, your lienholder will release the lien and the car is officially yours. 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. What Is a Car Lien in Rhode Island?Ī car lien is a type of collateral for auto loan lenders. After that, the lien will be released and you can apply for a clear title with the Rhode Island Division of Motor Vehicles (DMV). This means the vehicle technically belongs to the lender (lienholder) until you completely pay off the auto loan. ![]() Most often, when you finance a vehicle, the lender will place a lien on your car title.
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