Overhaulin'

what is a lien car sale?

I was talking to this tow truck driver the other day I have a car for sale and he was interested so we were talking about this and that. He decided he couldn't afford it but mentioned that if I wanted to make some extra money the place were he works has a lot a lien car sales or something and I could buy those and sell them for more. Any one know what he's talking about? What is a Lien Car sale?

Public Comments

1. A mechanic's lien is a claim that a mechanic can make on a vehicle if the owner cannot or will not pay for the repairs. In some circumstances, the mechanic may sell the car to pay off the debt. In some states, any proceeds above the amount of the debt and cost of the sale must be returned to the owner.
2. When someone has a loan on a car from a 3rd-party, like a bank, it's called a "lien." When he stops paying on the note, the car is repossessed and a lien sale is held. The bank is really only interested in getting what they are still owed on the note so, yeah, sometimes you can get some good deals. You have to know cars and the market pretty well; it's not an arena for an amatuer unless you like expensive lessons.
3. Well technically, what the guy told you you could do is illegal. You have to be a licenced car dealer in your state if buy and resell any vehicle for profit, although there are people that will do it to make some extra cash. I just wouldn't make a habit of it because the state keeps tabs on such acitivities and can audit you. There are severe fines for selling vehicles for profit without a state license. Trust me, I learned all the ins and outs of this stuff when I opened up my car dealership. To answer your question finally, a lien sale is basically selling of vehicles that were repo'd because of the owner's not making payments on time. A lot of used car dealers buy their inventory like this from auctions.