What is a lien on a car?
Avoid getting stuck with someone’s debt.
Roughly 40% of used vehicles in Canada have a registered lien.1
A lien is a legal claim or interest that a lender has on a vehicle until the debt is fully repaid. If you buy a car with an active lien and the debt isn’t cleared, you could be held financially responsible or the vehicle could be repossessed.
How do I check if a car has a lien?
A nationwide lien search2 is included with every CARFAX Canada Vehicle History Report + Lien Check.
CARFAX Canada uses the VIN (Vehicle Identification Number) to search government records in each Canadian province and territory (excluding Northwest Territories) where the vehicle is currently and has historically been registered.
What will a CARFAX Canada Vehicle History Report + Lien Check show if there is a lien found?
If a lien is found, the CARFAX Canada Vehicle History Report + Lien Check will include critical information to help you clear the lien, including:
- Debtor information: Name and address of the individual or business that owes the money
- Secured party: Name and address of the lender or financing institution
- Registration agent: The individual that registered the lien on behalf of the lender
- Collateral classification: Confirms that the lien is tied to the vehicle in question
A lien doesn’t necessarily mean you shouldn’t buy the car - but it does mean you need to ensure the debt is cleared before taking ownership.
Get peace of mind when it comes to liens.
A CARFAX Canada Vehicle History Report + Lien Check searches billions of data records so you can avoid costly hidden problems, like getting stuck with someone's debt.
Nationwide lien check2
Accident history
Registration records
Open recalls
Stolen vehicle check
Import & export records
Service records
and more
Every CARFAX Canada lien check comes with a Canadian Lien Guarantee.3 If our lien check fails to accurately reflect the enforceable lien status of a vehicle at the time of your search, CARFAX Canada will reimburse you.
Frequently Asked Questions
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If you’ve already sealed the deal on a used car and it has an active lien, it’s important to contact the seller and lender to inquire about the lien. You can find their information in the CARFAX Canada Vehicle History Report + Lien Check. Regardless of whether the seller agrees to pay off their debt or not, you will still need to clear the lien and get a lien release letter before you can legally drive the vehicle.
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A lien holder is typically a bank or financing institution that provides a loan when a vehicle is purchased. The lien holder will register a lien against the vehicle as security or collateral for the money they loaned. If the dept isn’t paid back, they could repossess the vehicle.
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A lien release letter is an official document from the lien holder (such as a bank or financing institution) confirming that the loan has been fully paid, and that they no longer have a legal claim on the vehicle. In other words, it’s proof that the vehicle is lien free.
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As the buyer, request that the current vehicle owner pays off the lien and provides a lien release letter before you take ownership. You can find the owner and lender’s information in a CARFAX Canada Vehicle History Report + Lien Check. As the seller, ensure that any debt owed on the vehicle is fully paid and obtain a lien release letter before proceeding to sell it.
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A lien doesn’t necessarily mean you shouldn’t buy the car—but it does mean you need to ensure the debt is cleared before taking ownership. Use the owner and lender’s information found in a CARFAX Canada Vehicle History Report + Lien Check to request that the current vehicle owner pays off the lien before you take ownership.
1 Based on data found on CARFAX Canada Vehicle History Reports ordered in 2023, with a Lien Check.
2 CARFAX Canada will search for liens in each province or territory in Canada (excluding Northwest Territories) in which the vehicle (identified by its VIN) (i) is currently registered; and (ii) has historically been registered.
3 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.
