Lien Releases Are The Reason Behind Title Problems

  • 2 min read

In Kansas, a dealership faced a hefty $87,000 default judgment due to unresolved complaints. Customers were left without vehicle titles and burdened by outstanding loan balances on trade-ins, resulting in double payments and no ownership.

Hidden Risks in Trade-Ins
The dealership allegedly sold a vehicle without paying off the trade-in, a critical yet often overlooked issue. When a dealership fails to settle the outstanding loan on a traded vehicle, buyers and sellers face severe consequences.

The ‘Out of Trust’ Predicament
This practice, termed ‘out of trust,’ arises when a dealership delays paying off loans on trade-ins to manage financial woes. It allows them to utilize funds intended for loan settlements for other expenses, risking financial instability.

Consumer Fallout and Credit Implications
Consumers suffer when dealerships engage in this practice. Buyers may face title complications or discover undisclosed liens, impacting their credit. Trade-in owners could witness delayed loan payments, leading to credit damage.

Liens: Vital Clearances
Clearing liens from vehicle titles is crucial. Even after payment, unless proper documents are processed with the DMV, liens remain on the record. Dealerships often disregard this, causing ongoing title issues for buyers and sellers.

Addressing title problems
When encountering dealership title issues, scrutinizing lien releases is key. Identifying a potential lien release default might offer insights into resolving complex title problems and safeguarding transactions.

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