Liens on a Title

A lien is a legal claim on an asset that is usually used as collateral to pay a debt. Liens are applied to a vehicle title 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.

Once you title your vehicle in Virginia, DMV will forward 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.

Obtaining Your Title After Paying Off Your Vehicle Loan

When you pay off your vehicle loan, the lender has 10 days to notify you and must send you the title showing your lien as satisfied.

Most lenders participate in DMV’s electronic lien program and will “release” the lien automatically, which triggers DMV to mail you a new title to your address listed in DMV records. This will be a “clean title” that states “no liens.” Call DMV if you don’t receive your title within seven business days of paying off your loan.

For lenders who don’t participate in the electronic lien program, the process works a little differently. The lender will manually release your lien by signing and dating the lien release section on the title and mail the title to you directly. When you receive the title, you need to visit a DMV customer service center to apply for a substitute title and have the lien removed from DMV records. If you do not get a substitute title at DMV, you’ll need to get a lien release letter from the lender and a new title from DMV if your title is ever lost or destroyed.

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, or merged with or been taken over by another business, you must submit evidence of this, along with evidence that the lien has been satisfied. This includes:

  1. Evidence that the lender/dealer is no longer in business:
    • If the lender was a motor vehicle dealer:
      • Obtain a 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 was based. Virginia lienholders can contact MVDB at 804-367-1100, extension 2.
      • If the dealer merged with or was taken over by another business, include a lien release for the vehicle from the new business and provide supporting documentation linking the original lienholder with the merged or takeover lender.
    • If the lender was 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 was based. The form must state that the lienholder has gone out of business or, merged with or been taken over by another business entity. Virginia lienholders can call the Clerk's Office at the SCC at either 804-371-9733 (local) or 866-722-2551.
      • 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 was 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.
  1. Evidence of request for lien release:

    Please provide:

    • 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 receipts from the lienholder, billing notices, or any other evidence indicating that the lien has been paid in full.
  1. Notarized statement of lien satisfaction:

    A notarized statement identifying the vehicle by vehicle identification number (VIN), make, and year, and stating that the lien has been satisfied.

Supplemental Liens

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 lienholder. The lienholder 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 lienholder 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.

You cannot designate a beneficiary for a vehicle that you own if there is a lien on it.