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.