Buying or selling a car that has a lien on the title can be very tricky. The lien on the title entitles the lien holder to take possession of the vehicle if the lien has not been paid. Anytime there is a lien on a title; there is a question of ownership. The lien holder still has a vested interest in the property. This is why buying or selling anything with a lien on it becomes difficult. If there is an active lien on a vehicle that you wish to buy, sell, or use as collateral for a loan, here are some things you should do first.

1. Get in touch with your lender. If the lien on your vehicle is your current car loan, find out the amount of the payoff. You should also find out how to satisfy the loan and recover the title. Getting a new title can take several weeks since you will have to obtain one through your state’s department of motor vehicles.
2. Determine the value of the vehicle. Whether you are buying, selling, or going to Embassy Loans to take out a car title loan, find out what your vehicle is worth first. You can use Kelley Blue Book to do so. Visit their website to get an accurate, current estimate of the value of your car. This information is valuable for a number of reasons. When you find out that the value of your car is $5,000, for example, you learn that you can make a profit since the amount left on your existing loan is just $2,500.
3. Transfer your loan. If you have an existing loan, you may be able to transfer the balance of the loan to a new buyer. The buyer would take over your payments and then pay you the difference for what the car is worth. For example, if the car is worth $5,000 and the remaining loan balance is $2,500, the buyer would take over the loan payments on the balance and pay you $2,500.
4. Make sure a car title loan makes sense. If you need to borrow $5,000 but you owe $8,000 on your car that is worth $10,000, a car title loan might not make much sense. Embassy Loans prefers that a customer’s vehicle be paid off entirely when doing a car title loan.

You can still buy or sell a vehicle that has an existing lien on the title. You can also use the vehicle as collateral for a car title loan. Make sure you understand the amount of the lien and how it is to be satisfied before proceeding with any action.