Question about car lien

I have a friend who a long time back bought a car with lien and got the ownership tranferred to him with the lien still on it. He drove the car for a few years and gave it away to the junk yard. Is he now still liable for the lien? and in the future?

from my experience, when you take a vehicle to the junk yard to get 50 or 100 bucks you sign over the ownership. i guess if there was a lien that would be transferred over to the junkyard with the ownership but i could be wrong.

he drove it to the junk yard, and they didn't ask for the ownership at all.

Don't know if anyone is stil monitoring this thread, but I'll take my chances.

Situation in point form:

1. Went to see a 2008 Hyundai Tucson GLS with 21000kms. Excellent condition - scratch free, no rust, pretty much near mint.

2. I ask what I think are all the right questions including whether or not there is a lien on the vehicle, and if the dealer is the legal owner. I had a carproof report that mentionned the previous owner and that there was a lien on it.

Salesman "You'd be lucky to find a dealer who isn't the owner of the car. If there was a lien on it, you'd be able to get for whatever you wanted".

From this I gather that the dealer has ownership of the vehicle.

3. I revisit the dealer the next day and make a deal to purchase the car. I speak with the sales manager who gives me the bill for the car so that I can take it back to the bank who will give me a check for the correct amount.

4. I'm at the bank with the bill of sales which I hand over to the account manager, and she notices that the sales manager at the dealership neglected to check the box that asks 'is there a lien, yes or no'.

5. We call the dealership to verify because naturally the bank cannot give me a loan and take a lien out on the vehicle if someone already has one. We get a fax back from the dealership with previous owner information and a written note stating that they called the former lienholder and all liens have been paid for.

6. Bank account manager performs her own search and calls the former lienholder to find out that the lien is still in place and that they haven't received any payment that would justify releasing it.

7. We call the dealership and speak with the general manager who says that they didn't expect to sell the car as fast as they did and only send the lien payment 2 days ago and that it wasn't yet cleared. Essentially the guy who sent me the fax blatantly lied to us.

8. I made the deal 15 Aug 09 and was supposed to pick the car up today. Now, I don't know when I will be able to take possession.

So: Am I totally screwed? Should I just wait this out? Will this eventually be settled?

Another issue is that since I'm buying a used vehicle in Ontario and bringing it back to Quebec, I need the registration documents signed by the former owner. I'm kind of having doubts as to the paperwork and documents that the dealership has and I'm afraid that I won't be able to register the vehicle in Quebec due to lack of proper documentation.

Comments?

Originally Posted by homeless06

I have a friend who a long time back bought a car with lien and got the ownership tranferred to him with the lien still on it. He drove the car for a few years and gave it away to the junk yard. Is he now still liable for the lien? and in the future?

A lien is secured to the vehicle, not the owner. This is why, if you buy a vehicle with a lien already on it, the vehicle can be seized even though you aren't the one with the lien and you then have to seek payment from the former owner.


I'm not a lawyer, but there may be some recourse for the company owed the debt with the original owner, but that responsibility would not travel through the owners of the vehicle.

No worries..just delay completing the transaction until the lien is cleared/or you can get a release letter from the bank/lienholder..


The bill of sale and ownership from the dealer should be all you need to register the car in quebec...if the dealer just wants to give you the ownership signed by the previous owner..run as fast as you can...

Originally Posted by johnsa

No worries..just delay completing the transaction until the lien is cleared/or you can get a release letter from the bank/lienholder..


The bill of sale and ownership from the dealer should be all you need to register the car in quebec...if the dealer just wants to give you the ownership signed by the previous owner..run as fast as you can...

From the SAAQ website: 'If you are buying a used vehicle, you must have the prior registration certificate, bearing the signature of the former owner and the automotive dealer.'

What makes me doubt a little is that if the dealership is unable to provide proof the lien has been cleared, there is a chance that they will be unable to produce the prior registration certificate much less one signed by the former owner. I spoke to the manager yesterday who told me they were still working on having the lien cleared. He stated that the car was brought in for trade-in at another dealer and they bought is from that dealer. Maybe I'm just worrying too much. This is my first car after all and so there are still some things that I don't know how they work.

if the selling dealer in Ontario owns the vehicle he has an Ontario ownership in the dealer's name not the previous owners name. Dealers transfer vehicles in their names when they own a vehicle.

Its not a mystery to clear any lien, pay off the lien older and get a letter saying that the lien holder usually a financial institution no longer has an interest in the vehicle.

It might take a while longer to get the lien removed from the lien registry, its the reason that a dealer would get a letter from the lien holder stating they no longer have an interest.

Most vehicles are financed or leased they majority have liens, its not a big deal to clear liens.

In addition if you are buying the vehicle from a licensed dealer its his responsability to clear a lien.

The bank that is loaning you the money is protecting their interest in doing their own lien check, any vehicle can have more than 1 lien, any lender will do their due diligence in making sure they are in first position as a lien holder.

A dealer should sell a vehicle with a clean ownership (no liens) if your selling dealer cannot provide you with proof that the lien was paid off, he is not in a position to sell you that vehicle. The vehicle could have been taken in trade by 3 dealers before him, you don't care nor should you be involved in who took it in trade.

If you registering an Ontario vehicle in Quebec you will also need an inspection in Quebec prior to registering the vehicle.

Originally Posted by AGR-1

Its not a mystery to clear any lien, pay off the lien older and get a letter saying that the lien holder usually a financial institution no longer has an interest in the vehicle.

It might take a while longer to get the lien removed from the lien registry, its the reason that a dealer would get a letter from the lien holder stating they no longer have an interest.

Most vehicles are financed or leased they majority have liens, its not a big deal to clear liens.

In addition if you are buying the vehicle from a licensed dealer its his responsability to clear a lien.

A dealer should sell a vehicle with a clean ownership (no liens) if your selling dealer cannot provide you with proof that the lien was paid off, he is not in a position to sell you that vehicle. The vehicle could have been taken in trade by 3 dealers before him, you don't care nor should you be involved in who took it in trade.

Right, so I'm wondering why the dealership went ahead and made a deal with me when they knew the lien hadn't been cleared. If it's so easy to do, why wasn't it done before they agreed to sell me the car? I heard second hand (bank told me dealer told them) that the cheque to clear the lien went out the wednesday after I made the deal (deal was made saturday), two days before I was supposed to pick up the vehicle.

I just spoke to the dealer manager a few minutes ago and he told me everything should be good first thing tomorrow morning (Tuesday). He told me last Friday it should be cleared today.

Should I ask for some sort of compensation from the dealership for this? Not that it's a matter of life and death but I do feel like my patience is being tried.

It could be several reason, perhaps they just got the vehicle and delayed paying it off for a few days, perhaps there was a "hang up" somewhere, perhaps the lien holder want to make sure the pay out clears the bank, and so on.

In your case, your bank is putting a lean on the vehicle and wants it cleared before advancing the funds. Someone paying cash its not a issue at all.

As a customer you should not be aggravated/delayed over lien issues when buying a vehicle from a dealer.

My problem is not with the bank, it's with the dealer not working to have the current lien removed in good time. It would still be a problem if I was paying cash because I still could not/would not take possession of a vehicle if some third party had a lien on it.

For example, if I had paid cash at the time of the deal and drove away with the vehicle, hypothetically (though not probable) the lienholder could have come to claim the vehicle from me.

I paid a $1000 deposit to the dealer as guarantee I was buying. At the very least,they could have initiated the lien-clearing process on Monday instead of Wednesday. If I do receive the car tomorrow, it'll have taken 5 business days to clear the lien. If they had done it on Monday, I'd have had the car on Friday.

Like I said, this situation is far from life and death but it is highly frustrating. The car is sitting on the lot; it's not like I'm waiting for it to arrive from the factory.

Wednesday now and still no car. No word from the dealership either as to the status of the lien (which most likely means that it has not been cleared).