When you buy a car, you will typically take out a loan from a bank or credit union to finance the purchase. As part of the loan agreement, you will sign a security interest document that gives the lender a lien on the car. This means that the lender has a legal right to take the car if you don't make your loan payments.
The lienholder will typically be listed on the vehicle's title. This is a public record that shows who owns the car and who has a lien on it. The lienholder's name will also be listed on your loan statement.
If you make your loan payments on time, the lienholder will release the lien when the loan is paid off. This will allow you to get a clear title to the car.
Auto liens are important for protecting the interests of lenders. They ensure that lenders have a way to recover their losses if borrowers don't repay their loans.
