Overhaulin'

What does it mean when a used car title is under a loan or lien?

I'm looking to buy this car, 2005, and when I check the carfax, it says: Title issued or updated First owner reported Registered as personal vehicle Loan or lien reported That was the last record of the car. I was told by a friend not to buy a car that is under a loan or lien. Does anyone have any info on this kind of stuff? Thanks. How can I tell if the car is still under a lien or loan? The carfax has no record after that, so am I to assume it is still under the lien? Here is the lot with the car... http://www.autotrader.com/dealers/dda/index.jsp?dealership_view_name=www.laautoexchange.net&car_id=228482141&dealer_id=57610146

Public Comments

1. It means that someone has a lien against the car. Don't buy it.
2. What that means is that the seller of the car owes someone money. It is not really all that big of a deal, but seller just need to satisfy the lien before the title can be transferred to you. Now, whether to run from the deal or not, well that depends on what type of lien there is. A loan lien just means that the seller has not yet paid off the loan on the car, and will have to pay it off from the money he gets from selling it. Other types of liens are placed on vehicles or homes if the seller doesn't pay a contractual obligation (example, a painter paints his house, but he does not pay the full bill) or it could be there because of a divorce settlement or other lawsuit. I would recommend avoiding that, unless the seller is honest in their intent to satisfy the lien.
3. It means the title is non-negotiable and until the loan is paid off you cannot transfer ownership
4. they can not sell a car until the loan/lien is payed off do not give them any money until they pay it all off..or you might just be throwing away money ...if they say it is paid off it should be signed off on the title or should have a paper saying it has been payed off from who ever has a loan/lien on it if you decide to buy it meet them at the DMV they can tell you if there is still a lien on it before you pay for it ...
5. Being an "05" it most likely means that the owner still has a loan on the vehicle and is making payments. Not a big deal. The bank will list this against the title until it is paid off. However if it is a lien (which I doubt) you will need to make sure that this is paid by current owner or you will be responsible for the amount before you can get a clear title.