How to Check for Outstanding Financing on a Car

You cannot legally complete the purchase of an automobile if the car is still financed--unless you pay off the lien holder as well as the seller of the car. Liens are placed on a car when it is financed, protecting the lien holder from being cheated out of the transaction if the car is resold. The buyer can resell the car, but the debt to the lien holder must be satisfied before the new owner can legally gain possession and obtain tags and title. That's why it's important to check for the presence of a lien before buying a car.

Instructions

1

Ask the buyer to provide you with the car's title, the official state document showing the ownership of the car. Review the title for authenticity. Make sure the printing on the title is clear and sharp. Hold the title under light and check for raised seals or water marks, as many states stamp these on titles. Compare the title from the seller side-by-side with a title from a car that you own; the comparison could be helpful in spotting an obviously fraudulent document, even if your title is from a different state and year. You can generally assume there are no liens on the car if the buyer presents you with what appears to be a legitimate title, but you can and should make other checks as well.

2

Check the car's vehicle identification number (VIN), which is visible on a small metal plate where the dashboard meets the window on the driver's side. Write down the VIN and compare it to the VIN listed on the title; the two numbers must match exactly. Suspect fraud if they do not. Take the VIN to a local office of your state's Department of Motor Vehicles. (All VIN numbers are recorded in state databases, and the Department of Motor Vehicles can check the VIN for ownership and lien holder information.)

3

Order a copy of the car's vehicle history report, which lists various data including details on ownership and liens (the vehicle histories are available online).