How do I read the lien details?

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.

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I’m buying from a dealer; do I need to search for liens?

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. 

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What do I do if the seller has a lien on the vehicle?

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 normal for there to be a lien, it’s important that you know how to ensure the lien has been properly paid off. 

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 it.

To remove a lien: 

Go to the bank with the seller to confirm the amount owed to pay off the lien.

Once you get this information, we recommend writing two cheques; one directly to the bank for the remainder of the lien. This will protect you and ensure it is paid off properly. If any money is left to pay to the owner, then make a second cheque out in the owner’s name.

When the lien is cleared from the financial institution, the owner will get a lien discharge form. You can ask the seller for a copy for your records.

It can take 30 to 90 days for the lien to be cleared from the registry where we get our information.

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What is a "Debtor"?

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 current owner of the asset, not the debtor.

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What is a lien?

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.

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Why is public lien information displayed on CARFAX Canada Vehicle History Reports?

  • 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.

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