Vehicle Lien

A vehicle lien is a legal claim on a car by a lender or other party as collateral for a debt. When a customer finances a vehicle, the lender registers a lien (in provincial systems like PPSA in Ontario or the equivalent in other provinces) which secures the loan against that vehicle. The lien remains until the debt is fully paid. For Canadian dealerships, checking for existing liens on trade-in vehicles is a crucial part of the process—they must ensure any lien on a trade-in is paid off (often from the sale proceeds) so the new buyer gets clear title. Additionally, when selling a financed vehicle, the dealership or lender will register a new lien, and then discharge it once the loan is paid off.