I know the feeling. You’re about to buy something and you’re excited to get your hands on the goods, but something feels too good to be true. Is that car stolen? Does it have a hidden lien nobody mentioned? How can you tell? In that moment it’s easy to forget that there could be something wrong with the title, but a little caution goes a long way. Even seasoned car buying veterans can make mistakes during this step of the process costing precious time and money.
To ease your concerns, let’s discuss how to tell if you’re about to buy a stolen vehicle or one with outstanding liens on the title. We’re not here to put the fear of God in you. Stolen cars and hidden liens are extremely rare, but it’s better to be armed with knowledge than left hanging out to dry.
Ease the stress of car buying with a VIN Check from Dirt Legal.
Shady private parties and cut-rate dealerships will do anything to offload a car with title issues.
How to Tell if a Car is Stolen or Something is Amiss
Trust people at church, not on Craigslist. Most of this trouble can be avoided if you ask to see the title right off the bat – maybe even before you meet in person. If the owner can’t produce it, consider the possibility that the seller is trying to pull one over on you. Sometimes there’s a valid reason for a missing title but in most cases there isn’t.
Five dead giveaways that something is very wrong
These are not always cause for concern, but small differences in the story could make or break the legitimacy of a deal.
Tampered locks. You walk up to the car and notice the trunk lock or door lock has been punched out. The owner says it’s no big deal, that some kid stole his subwoofers once and he never got around to fixing it. But maybe that’s not the real story.
Ruined ignition. Wires are everywhere, the ignition is gone, or ignition barrel – the place where the key goes – is smooth enough to start it with a screwdriver. Shoot, I once saw a guy starting a motorcycle with a pocketknife. As you may imagine, those are all big red flags.
Expired tags. A stolen car’s plates are usually stolen as well, but they often come from a completely different car. That means the registration will most likely be lapsed if it’s been awhile since the plates were stolen.
The owner says the title is on its way. Don’t give me that sh*t! Call me when it gets here. Until then, sayonara.
The title has been messed with. There’s a signature, date, or scribble on the title or a piece is missing. Any of those could easily make it null and void when you show it to the DMV. Ask the owner to explain the situation and file for a new title if there is reason for doubt.
The paint over this VIN could make it hard to read.
Less Obvious Title Issues That Catch Veterans Off Guard
Let’s dive deeper into more specific indicators of a stolen vehicle, hidden lien, or general title problem.
The VIN doesn’t match. Read the VIN on the title, then read the VIN on the car. If there’s any difference more serious than “that B could be mistaken for an 8,” reconsider going forward. I bought a car with a one-digit issue and sorted it out at the DMV later, but I waited until after I bought the car which was still a big risk. I later discovered that my local DMV has a one-digit limit and anything beyond that requires extensive work to correct. Some cars have secondary VIN locations which might be more easily legible.
Easily check any VIN using our VIN Check Service.
The seller is a snake oil salesman. “You ski? So do I! Have you been to So-n-So Mountain? Me too! I fell off a mountain in Switzerland last year and broke every bone in my body, and somewhere along the way the title for my Honda went missing. No worries though, just pay one of those title companies like Dirt Legal and get a new title! Easy peasy bro!” That’s a pretty good sign there’s a serious problem, most likely that the car is stolen, the seller hasn’t paid off the lien, or they don’t legally own the car.
They give you an old title. This one has happened to me as well. The vehicle’s owner was super chill, the title was clean, and everything about the sale went great. I sent the title in for transfer to my name and a few weeks later I got a letter from the DMV saying there was a newer title on record than the one I gave them. Oh balls. Luckily, it was a simple mistake on the seller’s end. But that could have ended very badly.
What is a Title Lien? How Do I Spot One?
Liens are what a dealership puts on your title when you borrow money to buy the car. There are many other kinds of liens including a mechanic’s lien for unpaid work. A lien means that until you pay off the owed balance, the car technically belongs to the person whose name appears on the lien – the lienholder. All those memes such as “Does the bank know you’re racing their car?” are referring to car liens.
If someone dishonestly sells a car with an active lien and the bank finds out, the bank will try to repossess the car and sell it to recover their losses. If you’re the unfortunate one who bought the car you will have a lot of explaining to do when the bank knocks on your door. To be clear, you can legally purchase a car with an active lien if the seller transfers the lien to you. This is best done at the bank where the lien is held.
In some cases, the car’s title might show a lien that has already been paid off. Ask the seller for a lien release (a document provided by the bank) to prove the lien has been satisfied.
What Does a Title Lien Look Like?
On the title there’s a space for Lienholder Information. Once the lien has been satisfied, the lender will stamp the title very obviously somewhere near that area and sign the Lien Release section. Some states will issue a new title at that time, one that simply says “previous electronic title” as the lienholder information, indicating a previous lien was satisfied. Other times the bank will give you a Lien Release form showing the lien has been paid. These are all okay and should not dissuade you from buying a car.
If there’s a lien indicated on the title and no clear sign that it’s been satisfied, ask the seller about it. If they say they will take care of it after the sale, kindly offer to do the deal at the bank in question. If the seller declines they may be up to no good.
Keanu Reeves would not buy a stolen car. Reason #8972340 to be like Keanu.
How Do I Know I’m in the Clear?
Run the VIN as early as possible. A VIN check from a trusted source will return any major title issues, liens, and most importantly any records of theft, both former and active. If you request the VIN from the seller they should understand your reasons. Simply explain you’re trying to protect yourself from getting burned. If they still refuse to give you the VIN, that’s a big red flag.
You can also call the local authorities and ask them to run the license plate to make sure it matches the vehicle and isn’t stolen.
Dirt Legal Can Help
Having doubts about a car? Ease the stress of car buying with a VIN Check.
Make use of these inexpensive services early in the process and you could avoid any potential heartaches or financial losses that could be waiting on the other side.
Visit the links above for more information and feel free to call us with any questions about the titling process. We’ll help you navigate those tough situations and can even run VINs for you.
We are not attorneys. This article is not legal advice.
Whether insurance will cover the theft depends on your level of coverage at the time of the theft. If you have comprehensive coverage on your insurance, then it should pay to replace your car.