How Does a Car Lien Work?
Introduction Individuals who have the money to purchase a car without the need to take out a car loan don’t have to worry about a lien holder. Many people, however, require financing from a bank or financial institution in order to purchase a car. The finance company providing the funding has a co-ownership relationship with the car owner. As a result, it seeks to protect its financial interest by putting a lien on the vehicle. The lien remains on the car as long as the finance company has a financial interest in the vehicle. Once the lien is paid off, its interest is over and the lien is removed. Loss Payee and Additional Insured As a result of being a co-owner, the finance company must be listed on the car’s auto insurance policy. The request to be listed as an additional insured and loss payee is not unusual. In the event of an auto accident in which the car owner is sued, the finance company, as co-owner, can be brought into the suit. Therefore, it must be added as an additional in
