Fast Title Lenders > FAQs > What is a Lien?

What is a Lien?

Title Loan Lien
A lien is usually added by the lender to your title during a car title loan.

As you search for a title loan you may see the term “lien free title” as a requirement for a title loan. This is a common requirement. So, what is a lien?

A lien is a security interest placed on a piece of property, in this case a vehicle, by a lender.

Other Vehicle Lien Types

There several other types of liens that can be placed on vehicles including:

  1. Mechanic Liens
  2. Storage Liens
  3. Insurance Liens

Mechanics Liens

Mechanics Lien for Title Loan
Mechanics liens can occur when a repair is not paid for.

A mechanic can place a lien on a vehicle should you take the vehicle to a mechanic, have it repaired, and fail to fully pay for a repair. To cover their costs the mechanic can place a mechanic’s lien in the vehicle.

Storage Liens

Storage Lien for Title Loan
Towing and storage companies can put liens on vehicles to recover unpaid fees.

A storage lot or towing company may place a lien on a vehicle. These usually occur when you either get in a car accident and have the vehicle towed and stored.

These can also occur if you park your vehicle in a no parking zone, at a store parking lot for longer than a day, or any other reason where the vehicle is towed and stored. If you fail to pay the cost associated with towing and storage, the company may place a storage lien on the vehicle to recover their costs.

Second Liens

A second lien is when an additional lender records a lien on a vehicle title when there is an existing lien for a loan that is not fully satisfied. While second lien title loans are possible, they are rare. It is much easier to simply repay the original loan prior to getting a title loan.