What Is a Mechanic’s Lien and How Do You Get Rid of It?

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A car lien is a legally binding contract between a lienholder and the person who finances the purchase of a new or used vehicle. All financed vehicles have a lien on them, and the bank or financial institution that offers the loan is considered the lienholder.

Until the borrower pays back the loan in full, the lienholder retains ownership rights to the financed vehicle. If the borrower fails to make timely payments, the lienholder can repossess the car.

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