FAQ

CARFAX Canada recommends including a lien check with your order when you are purchasing or selling a used vehicle through a private sale.

Licensed vehicle retailers in Canada are not permitted to sell a vehicle that still has an active lien against it, and many provinces have consumer protections in place to protect consumers should a licensed retailer sell a vehicle with a lien on it. 

Licensed retailers take many steps to confirm and when applicable, clear a vehicle’s lien status prior to selling the vehicle. Many licensed retailers will have documentation to confirm that there is no lien on the vehicle (such as CARFAX Canada Vehicle History Report + Lien Check and/or other documentation from a provincial lien registry or from a lender). If your vehicle retailer has documentation confirming no lien against the vehicle, you would not require a lien check.

If you require additional peace of mind requiring the lien status of a vehicle you intend to purchase from a licensed retailer, then we would recommend ordering a CARFAX Canada Vehicle History Report + Lien Check.

CARFAX Canada uses the VIN to search government records in each Canadian province and territory (excluding Northwest Territories) where the vehicle is currently registered and where it has historically been registered. We do not check for liens or titles in any U.S. state.

If a VIN has no registration records in Canada, we cannot check for liens. We cannot guarantee lien checks on trailers, recreational vehicles or heavy-duty equipment.

Purchasers should always get written confirmation from vendors that there is no lien on the vehicle.

There are some details in the lien information to pay attention to:

Business debtor and individual debtor

• This can happen in the case of a co-signer. If a business goes bankrupt, to avoid not getting money they might add an individual debtor.

Registration period

• Shows how long the lien is valid for and provides you details to see when the lien was registered.
• If they are not done paying at the end of the term or refinance, then even though its expired, the lien company can take another one out.

Secured party

• Tells you who provided the lien – typically a financial institution.

Registering agent

• The company who registered the lien.

If you are buying from a licensed dealer in Canada, it is against the law for them to sell a vehicle with a lien on it. In this case, you do not need to conduct a lien search.

While you may have paid your outstanding debt obligation to your lender, the process of clearing that lien from government records has not yet been completed.

Contact your lender to request documentation noting that they have released their interest in the vehicle/have no further interest in the vehicle and keep a copy of that document with your records to show interested buyers. Be prepared to contact your lender to further verify this for any potential purchaser.

Contact your lender to request support in having the lien record cleared from the PPSR/PPSA records. Once your lender confirms that the lien has been cleared from PPSR/PPSA records, request a copy of a clear provincial lien check document from them or you may need to obtain a provincial lien check document from the provincial PPSR yourself.

Keep a copy of this record as confirmation for purchasers that though there was an active lien record at the time of your CARFAX Canada Vehicle History Report + Lien Check order, the province has since cleared that record as of the date noted on the provincial lien check document. The provincial lien check record should be issued by the same province as the one listed on the CARFAX Canada report.

If you are buying a vehicle privately, it’s important to ensure you’re aware if there is a lien (money owing) on the vehicle. It’s common for there to be a lien on a vehicle. It’s also very important that you know how to ensure the lien has been properly paid off before purchasing a vehicle that has a lien on it.

A car lien is an interest in the car that the owner grants to another party (such as a bank, financial institution, or other party), usually as security or collateral for a debt, until such debt has been discharged.

If there is a lien, make sure it's cleared before you take possession of the vehicle or else you could become legally responsible for paying it back.

In some instances, a seller/owner may have recently paid off their loan balance, but a lien is still being reported against the vehicle. This is because it can take some time for the lender and province to cancel/de-register the lien.

If the owner/seller says the balance has been paid in full, please see: I paid my debt but there is still a lien showing on my vehicle's Vehicle History Report + Lien Check. What do I do?

NOTE: Once cleared from the registry records, existing CARFAX Canada Vehicle History Report + Lien Check reports for the VIN will not update to reflect this change. To obtain a Vehicle History Report + Lien Check for the VIN showing “No Lien Records Found,” a new report would need to be ordered.

CARFAX Canada offers the following guarantee for our lien checks:

If for some reason our lien check fails to accurately reflect the Canadian enforceable lien status of a vehicle at the time of the search, CARFAX Canada will reimburse the party that purchased the report and relied on it to their detriment to a maximum amount of (1) the value of the car (2) the value of the lien (3) Five Thousand Dollars Canadian ($5,000.00), whichever is lower.

For more information on lien checks, please see: How does CARFAX Canada check for liens?

This term is used and seen on the report if the vehicle has a lien on it. The debtor is the borrower in a lender/borrower relationship. Typically, the debtor is also the owner of the vehicle.

The responsibility of the lien follows the asset, not the debtor – meaning that if a vehicle is sold while there is an active lien against it, the debt would be the responsibility of the current owner.

A car lien is an interest in the car that the owner grants to another party (such as a bank, financial institution, or other party), usually as security or collateral for a debt, until such debt has been discharged.

As an example, if you own a vehicle and you finance all or some of that vehicle with a bank, your vehicle will likely have a lien registered against it by the bank. The vehicle is the bank’s “security” that you will pay back the money they loaned you. If you don’t pay it back, they could repossess the vehicle.

In Canada, lien information is publicly accessible through sources such as PPSA.ca (fees apply).

When you search for a lien, it could return details such as the lien holder's name, address, the company who financed the lien, etc.

When a lien is granted, the individual who signs the documentation is noting that it is public information, and they are acknowledging that the lien can be searched for.

It’s important to note that a lien is attached to the vehicle, not the individual. So, when buying a used vehicle, it's important that buyers are aware of any outstanding liens so that they don’t get stuck with someone else’s debt.

If you find out there is a lien on a vehicle you intend to purchase, don’t worry. They are easy to clear before you take possession. We have instructions on our website that you can follow.

If you have any other questions on why certain details are being displayed in the lien information, we recommend you reach out to the secured party who financed the lien.