Liens On a Title
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.
Releasing the Lien
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 can either (1) exchange it at DMV for a clear title and pay the fee, or (2) keep the title that displays the lien as satisfied. In either case, make sure that the lien release is noted on DMV's records and obtain an updated copy of your title.
- Releasing the Lien Electronically: If your lender participates in Virginia's Electronic Lien program, the lender will electronically release the lien with DMV. DMV's records will no longer show a lien on the vehicle. A new title will be mailed to your address on record with DMV, with "Lien Satisfied" and the date printed on the title. You do not need to take any action.
- Releasing the Lien Manually: If your lender does not participate in Virginia's Electronic Lien program, the lender will mark on the title that the lien was satisfied and mail the title to you. However, you must still remove the lien from DMV's records by bringing the title to any DMV customer service center and applying for a substitute title. DMV will issue you a new title with "Lien Satisfied" and the date printed on the new title. DMV urges you to remove the lien from DMV records as soon as you receive the title from your lender. If you lose the title or it is destroyed, you must obtain a lien release letter from the lender. This may be difficult if the lender changes names or location, merges, or goes out of business.
Inability to Obtain a Release of the Lien
If you are unable to obtain a lien release because the lender has gone out of business, merged, or been taken over by another business, you must submit evidence of this, along with evidence that the lien has been satisfied. This includes:
- Evidence that the lender/dealer is no longer in business:
- If the lender is a motor vehicle dealer:
- Obtain written “Out-of-Business” confirmation from the Virginia Motor Vehicle Dealer Board (MVDB) or from the dealer licensing authority in the state where the dealer is based, confirming the dealer is out of business, has merged with, or been taken over by another dealership. Virginia lienholders can contact the Motor Vehicle Dealer Board at (804) 367-1100, extension 2.
- If the dealer merged with or was taken over by another company/corporation/or lender, include a lien release for the vehicle from the merged or takeover lender and provide supporting documentation linking the original lienholder with the merged or takeover lender.
- If the lender is a business and not a motor vehicle dealer:
- Obtain a written "Certificate of Fact" from the Clerk of the Commission for the Virginia State Corporation Commission (SCC) if you are a Virginia lienholder; or an official form from the licensing authority in the state where the lienholder is based. The form must state that the lienholder is out-of-business, has merged with, or been taken over by another business entity. Virginia lienholders can contact the Clerk's Office at the SCC at either (804) 371-9733 (local) or 1-866-722-2551 (out-of-town).
- If the lender has merged with or been taken over by another company/corporation/or lender, include a lien release for the vehicle from the merged or takeover lender and provide supporting documentation linking the original lienholder with the merged or takeover lender;
- If the lender is a sole proprietor and not a Virginia licensed motor vehicle dealer, obtain written confirmation of the lienholder’s out-of-business status from the locality in which the lender was licensed to do business.
- If the lender is a motor vehicle dealer:
- Evidence of request for lien release:
- Returned certified mail addressed to the lender as evidence that you requested a lien release for your vehicle
- Any other documentation which may serve to provide evidence of the satisfaction of the lien, such as payment stubs from the lienholder, billing notices, or any other evidence of lien payoff indicating that the lien has been paid in full.
- Notarized statement of lien satisfaction:
A notarized statement identifying the vehicle by VIN, make, and year, and stating that the lien has been satisfied
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.
Transferring a Vehicle With a Lien
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 motor vehicle 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.
Refer to Mechanic's or Storage Lien (MSL) for additional information about liens.