Auto liens are notations on a vehicle title that serve as collateral on a lender's loan. A lien prevents a titleholder from selling a car and reaping the total profit from the sale--the lien holder in first position must be paid first. All auto loans have corresponding liens on titles. The only way to remove a lien from a title is to pay the loan in full and get the lien removed at the department of motor vehicles.
- Skill level:
- Moderate
Instructions
Things you need
- GMAC account statement
-
1
Pull a current copy of your credit report. See the Resources section for a link to a free copy. Your credit report will show your current standing on your auto loan--if it's delinquent or up to date, and how often it has been late. In addition, your credit report will show how much is currently outstanding.
-
2
Determine how you'll pay off your auto loan. Some options include: taking the money out of savings, using part of a retirement account, selling the car and selling other assets. Remember that if you're selling the car to remove the lien, the purchase price must be at least as much as the payoff on the car--or else you'll need to pony up the difference.
-
3
Contact GMAC for an accurate payoff figure. This figure will include a total amount due through a specific date, a per diem (a daily dollar amount required after the due date) and an expiration date. Do not order the payoff until you are certain you can pay the loan in full. See the Resources section for the GMAC payoff line.
-
4
Send the correct payoff to GMAC before the expiration date on the payoff statement. If you are selling the vehicle, you'll need to handle the loan closing (if the other party is financing the car) with a notary public who will transfer ownership at the closing table.
-
5
Contact GMAC to get a release of lien. This will only be set if the loan is completely satisfied. Take this letter, your title and a paid-in-full letter for your GMAC loan to your state's DMV office. The representative at the DMV will clear the lien from your title.
