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Can I Sell a Car with a Lien on It to the Junkyard?

How Do I Transfer Ownership Of A Damaged Car

Selling a car with a lien on it can be a tricky process, especially if you're trying to sell the car to a junkyard. In this article, we'll explain what a lien is, how it affects the sale of a car, and what your options are for selling a car with a lien to a junkyard.

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What is a Lien?

A lien is a legal claim that a creditor has on a borrower's property, such as a car. When a borrower takes out a loan to purchase a car, the lender (such as a bank or financing company) will usually place a lien on the car as collateral. This means that the lender has the right to seize the car if the borrower fails to make the required loan payments.

How Does a Lien Affect the Sale of a Car?

If you have a lien on your car, you cannot sell the car without first paying off the lien. This is because the lien gives the lender the legal right to the car until the loan has been paid in full. If you try to sell the car without paying off the lien, the lender could potentially seize the car from the buyer and sell it to recover the outstanding loan balance.

Selling a Car with a Lien to a Junkyard

If you're trying to sell your car to a junkyard, the process will be slightly different than if you were selling the car to a private buyer. Here's what you need to know about selling a car with a lien to a junkyard:

  1. Contact the Lender: The first thing you'll need to do is contact the lender that holds the lien on your car. Explain that you want to sell the car to a junkyard and ask them what you need to do to pay off the lien. They may require you to pay off the entire loan balance or a portion of it, depending on the terms of your loan agreement.
  2. Get a Lien Release: Once you've paid off the lien, the lender will issue a lien release. This document proves that the lien has been paid in full and gives you the legal right to sell the car. Make sure to get a copy of the lien release before you sell the car to the junkyard.
  3. Sell the Car to the Junkyard: Once you have the lien release in hand, you can proceed with selling the car to the junkyard. The junkyard will likely ask to see the lien release before they agree to purchase the car. They may also ask for other documents, such as the title and registration for the car.
  4. Transfer the Title: In most cases, you'll need to transfer the title of the car to the junkyard when you sell it. To do this, you'll need to fill out the appropriate paperwork and submit it to your state's Department of Motor Vehicles (DMV). The junkyard may be able to help you with this process.
  5. Get Paid: Once the sale is complete, the junkyard will pay you for the car. Keep in mind that the amount you receive may be less than what you expected, as junkyards typically pay less for vehicles than private buyers.

Tips for Selling a Car with a Lien to a Junkyard

Here are a few tips to keep in mind when selling a car with a lien to a junkyard:

  1. Shop Around: Not all junkyards will offer the same price for your car. It's a good idea to shop around and get quotes from multiple junkyards before deciding which one to sell to. This can help you get the best price for your car.
  1. Consider the Condition of the Car: The condition of your car will also affect how much you can sell it for. If your car is in poor condition, it may be worth less to a junkyard than a car that is in good condition. Keep this in mind when negotiating the price.
  2. Don't Forget About Taxes: Depending on where you live, you may be required to pay taxes on the sale of your car. Be sure to check with your local tax authorities to see if you'll need to pay taxes on the sale of your car to the junkyard.
  3. Understand Your Rights: If you're having trouble paying off the lien on your car or if you're being asked to pay more than you think is fair, it's important to understand your rights. You may be able to negotiate with the lender or seek legal assistance if you feel that your rights are being violated.


Selling a car with a lien to a junkyard can be a complex process, but it's not impossible. By following the steps outlined above and understanding your rights as a borrower, you can successfully sell your car to a junkyard and move on to your next vehicle. Just be sure to pay off the lien and obtain a lien release before you sell the car, and make sure to get the best price possible for your car by shopping around and understanding its condition. Overall, it's important to be proactive and do your due diligence to ensure a smooth and successful sale.

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