A lien is usually placed on a vehicle when you first purchase it unless you pay the full cost with your own funds. A lien may also be placed on a vehicle if you refinance it. Your lien will be recorded on your title.
Once you title your vehicle in Virginia, DMV forwards your title with the lien recorded to your lender (lienholder). You will receive the registration card and license plates if you have also registered the vehicle.
When you pay off your vehicle loan, the lender has ten days to notify you (§ 46.2-643) and must send you the title showing your lien as satisfied. When you receive the title, you have two options. You can exchange it at DMV for a clear title and pay the fee, or you can keep the title that displays the lien as satisfied. However, you must be sure that the lien release is noted on DMV's records.
If you are unable to obtain a lien release letter because the lender has merged, changed names or address, contact the State Corporation Commission (SCC), or, if the lienholder is a motor vehicle dealer, contact the Motor Vehicle Dealer Board (MVDB) to request information about the lenders's new name or location. If the lender has gone out of business, you will need a letter from the SCC or the MVDB stating that the lender is no longer in business. You must also provide evidence (such as receipts and cancelled checks) showing that the lien has been paid in full along with a notarized statement that you have made final payment on the lien and returned certified mail addressed to the lender showing you requested a lien release for your vehicle.
Financing your vehicle after a title has been issued in your name or refinancing your vehicle is considered a supplemental lien. You must complete the "Application for Supplemental Lien or Transfer of Lien" (VSA-66), and submit the fee.
If there is an existing lien on your vehicle and you are transferring the vehicle to another individual, you must contact the lien holder. The lien holder must agree to this transfer and provide you with the Virginia title and a signed Transfer of Certification of Lien Information (SUT 4).
If the buyer is assuming the unpaid balance of the loan and was not on the original contract, the lien holder should satisfy the existing lien and record a new lien for the buyer. The buyer pays the 3% sales and use tax based on the unpaid loan balance plus any additional amount paid to the seller, whether or not the lienholder files a supplemental lien.
Please refer to Mechanic's or Storage Lien (MSL) for additional information about liens.