How to Remove the Lien Holder from Your Car Title
You can remove a lien holder from your vehicle title once your car loan has been paid in full. This is an administrative process involving you, the lien holder and the Department of Motor Vehicles in your state. Without removing the lien holder, you cannot sell or transfer ownership of the car in any way.
Step One: Check your Title
The first thing you need to do is check your car title to confirm it was issued in your name and the name of the lien holder. This is done in order to prevent you from selling the asset before the lien is paid. If the loan was not secured against the car, though, the lien holder's name will not appear on the title. Most car loans are secured against the car itself. Checking your title is the best way to assure you know which lien holder will need to be removed.
Step Two: Prove Loan is paid in Full
You can only remove the lien holder if the loan has been completed satisfied with the lender. The lender will often send you confirmation of this automatically through the mail along with instructions to remove them from the title. However, you may also have to contact the lender. You can do this in two ways: one, you can request a letter confirming the loan has been paid; two, you can have the lender fill out form MV-901 to confirm the loan is fulfilled. The second option is usually easiest, because you will need to fill this form out regardless. If you are getting a letter, the DMV may have to take multiple additional steps to confirm the loan has been fulfilled.
Step Three: Take Confirmation to DMV
You will need to take form MV-901 to the DMV. If you have a letter from your lender, take this letter as well. It is best if the letter is still sealed and on the company's letterhead. Since the DMV can be very crowded, you should check to see if there is a system to make an appointment. Often, changes in title need to be handled by a particular representative, and making an appointment is the only way to get through to this person or persons. The appointment will also save you from waiting in the general driver’s license line.
Step Four: Obtain new Title
The DMV will be responsible for issuing your new title. If you have lost your actual paper title, there will be a much longer process to confirm you no longer owe any debt on the car. The new title will be issued solely in your name. At this point, you will have to pay a nominal fee to have the new title issued. You will also want to contact your auto insurance company to see if there is any potential savings now that you own the car outright. Often, lenders have insurance requirements you can forgo once the car is yours.