What Does a Mechanic’s Lien Do?

What Does a Mechanic’s Lien Do?

The mechanic’s lien is a legal tool used by auto repair shops to collect debts for work that was completed. Eventually, the lien may give the shop full ownership of your vehicle at which point they can recuperate their losses by selling it. If you believe a mechanic’s lien was issued for the wrong reasons, contact an attorney.

If your car has an active mechanic’s lien, you cannot:

• Remove the vehicle from the shop’s possession
• Sell the vehicle
• Apply for a bonded title or replacement title
• Acquire a car loan or title loan for that vehicle

If you fail or refuse to pay your repair bill, whether it’s justified or not, the shop has the legal right to put a mechanic’s lien against your vehicle. Each state requires a different process for the mechanic to place the lien on the vehicle, but it usually only requires that they file some paperwork with the local DMV.

The claim is valid for the value of the amount of repairs plus some additional costs as determined by the situation. That means you may have to pay additional amounts over the cost of your original bill to remove a mechanic’s lien from your car title – it’s best not to let it get this far if you can help it.

Here is the general process for getting a mechanic’s lien in most states:

• The auto repair shop performs work on a customer vehicle.
• For whatever reason, the customer does not pay for the repairs.
• The shop files for a mechanic’s lien with the DMV.
• The shop can now legally hold the vehicle and the customer is legally prevented from selling it.

What happens next is up to the customer:

• If the customer settles the bill, they receive their car, and the lien is lifted.
• If the customer doesn’t pay by a set deadline (determined by the state), the shop will move to acquire and/or sell the vehicle. They may advertise a notice of public auction to sell the car to the highest bidder.
• The shop will submit the notarized paperwork showing all communication with the customer and proving all conditions were met, and a      copy of the repair bill will be attached.
• The DMV will issue a title to the new buyer, the shop will offset the bill (and might even make a profit), and the customer will have lost their vehicle.

It’s easy to see how that last point could open the door to scammers trying to get vehicles for free. It could also motivate shady sellers to offload their vehicle in a quick cash sale without disclosing the mechanic’s lien on the title. Thankfully, doing so is illegal, but it’s still best to run a quick VIN Check to uncover hidden liens on any vehicle you plan to buy.