Yes, you can register a car with a lien on the title, but the process involves specific steps and the lienholder's cooperation. The key difference is that you, the borrower, are not the sole legal owner until the loan is paid off. The lienholder (the bank or finance company) has a secured interest in the vehicle. For registration, the DMV essentially needs permission from this lienholder to proceed, as their name will also be on the title.
The most common scenario is that the lienholder handles the title paperwork directly with the DMV after you purchase the car. You provide the sales documents and proof of insurance, and they manage the rest. If you need to register the car yourself, you'll typically require a Title Application signed by both you and the lienholder, the original loan agreement, and a Lienholder Verification Letter from the bank confirming their information. States have varying requirements, so checking with your local DMV is essential. Failure to properly register a car with a lien can lead to legal and financial complications, including the lienholder repossessing the vehicle.
| State | Lienholder Notification Required for Registration? | Special Form or Document | Electronic Lien System (ELS) Available? |
|---|
| California | Yes, lienholder info must be on application | REG 256 (Statement of Facts) may be required | Yes |
| Texas | Yes, must be recorded with the county first | Application for Texas Title and Form VTR-272 | Yes |
| Florida | Yes, title is issued to the lienholder | HSMV 82040 (Application for Certificate of Title) | Yes, widely used |
| New York | Yes, lien must be recorded on the title | MV-82 (Vehicle Registration/Title Application) | Yes |
| Illinois | Yes, lienholder's name and address required | VSD 190 (Unexpired Registration Identification Card) | Yes |
The entire process is designed to protect the lender's investment. Once you make the final loan payment, the lienholder will release their interest, and you can apply for a clean title in your name alone.
