{"id":24203,"date":"2024-08-01T10:00:19","date_gmt":"2024-08-01T10:00:19","guid":{"rendered":"https:\/\/www.etags.com\/blog\/?p=24203"},"modified":"2024-08-01T14:02:11","modified_gmt":"2024-08-01T14:02:11","slug":"the-language-of-auto-liens-and-what-they-mean","status":"publish","type":"post","link":"https:\/\/www.etags.com\/blog\/the-language-of-auto-liens-and-what-they-mean\/","title":{"rendered":"The Language of Auto Liens and What They Mean"},"content":{"rendered":"

Here at eTags we don\u2019t just facilitate transfers or issue registration. We do more than add and remove owners from titles and arrange for personalized specialty plates.\u00a0 In addition to all the \u201cwork\u201d we do, we also receive lots of questions about all things automobile related, and we love that.\u00a0 It makes sense, since this is our thing, our job, our passion.\u00a0 Some queries we get are pretty straightforward, easy to answer, while others are a bit more complex to explain.\u00a0 All questions being equal in importance \u2013 we are firm believers in the idea that there is no such thing as a \u201cdumb\u201d question \u2013 we do like to take a bit more time with the multi-faceted topics.<\/p>\n

And today we\u2019re going to break down for you the concept of a lien and a lienholder. Whether you\u2019ve been down this road already or have never even heard the term, you may want to peruse the following facts, as liens are a common occurrence, and you never know when this knowledge may come in handy.<\/p>\n

If you\u2019re new to the word, let\u2019s begin with a bit of etymology. The word \u201clien\u201d derives from ancient Latin, its original form being \u201cligare,\u201d meaning, \u201cto bind.\u201d Over the years the term went through a transformation, landing in 1500\u2019s French as \u201clien,\u201d defined as \u201ca bond or tie.\u201d<\/p>\n

\"Handshake\"<\/p>\n

Today, the word still holds some of its earliest essence, in that our modern definition \u2013 a right to keep possession of property belonging to another person until a debt owed by that person is discharged \u2013 does speak of bonds and ties.<\/p>\n

And how does this relate to the automotive world?<\/p>\n

With 85% of all cars in the U.S. being purchased through financing programs, that means that 85% of all vehicles will have a lien on them.<\/h2>\n

What is a lienholder, you ask? Okay, let\u2019s break it down.\u00a0 Say you want to purchase a new motorcycle, but you don\u2019t have the $15,000 to spend all at once.\u00a0 So the dealership will give you the option to finance the vehicle. Meaning, a bank, a lender, a lienholder<\/em> will front the money to pay the dealership, pending an agreement from you that you will slowly pay back the money the bank laid out on your behalf.<\/p>\n

To simplify, you can think of a lien as a loan, a contract delineating the repayment of a specific amount of money. The important factor being that the vehicle technically belongs to the bank while there is any outstanding balance that needs paid. The lienholder, or lender, officially owns the vehicle until the debt you owe is satisfied.\u00a0 So at the time of purchase, the lienholder\u2019s name will be printed on your vehicle\u2019s title.\u00a0 And while you are still making payments to the bank or lender, the lending institution\u2019s name will most often remain on the vehicle\u2019s title. And not only that, but it is also quite common for the lienholder to keep the actual title in their possession until the lien is satisfied.<\/p>\n

\"Money<\/p>\n

There are some states that allow the purchaser to hold the title even while under a lien, but the lienholder still maintains the power to repossess the vehicle should the borrower fail to miss payments.<\/p>\n

The interesting detail here is that while you may not have the physical title in hand, and while your name may not even be written on the title as legal owner, your vehicle will still be registered in your name.\u00a0 Yes, you read that right. The title may belong to Bank USA, Inc, but your license plates and registration card will be listed in your name.\u00a0 Think of it as a joint ownership of sorts. Or at the very least, a mark of faith by your local DMV and lienholder that while the vehicle isn\u2019t yours yet, you are the trusted guardian and thus responsible to take care of your ride in the meantime.<\/p>\n

It is worthy to take note of the fact that a lienholder is not <\/em>a lessor.<\/p><\/blockquote>\n

The distinction between the two is as follows: a lienholder is simply a party that finances the vehicle on your behalf, owns the car in the interim, and once the debt is fulfilled, hands over ownership of the vehicle to you. Whereas with a lessor, you essentially borrow a vehicle, paying \u201crent\u201d for it each month for a set amount of time (usually a year or two), ultimately returning your ride at the end of your lease, relinquishing any associated ties or responsibilities.<\/p>\n

Now, once you\u2019ve understood what a lien is and what a lienholder means, there are a few more factors to consider:<\/p>\n

\"Agreeing<\/p>\n