A lien is a legal claim or charge against an asset to secure payment of a debt or obligation. In the case of a car, a lien may be placed on the vehicle by a lender, bank, or credit union to secure payment of a loan or lease. The lien holder may be different from the registered owner of the car, who is the legal owner of the vehicle.
This situation commonly occurs when a person buys a car and finances the purchase through a loan. The lender holds the title to the car and a lien is placed on the vehicle until the loan is paid in full. Until that point, the registered owner cannot legally sell the car without paying off the loan and satisfying the lien.
