What Happens if a Mechanic Puts a Lien on Your Financed Car?

A mechanic’s lien is a legal claim against your vehicle. It allows mechanics to hold or sell your car if you don’t pay. The lien applies even if you’re making loan payments. Most states give mechanics the right to keep the car until you pay. Some states let them sell it to recover what they’re owed.

What Is a Mechanic’s Lien?

A mechanic’s lien is a legal right that protects service providers. Mechanics can keep your car if you don’t pay for completed work. In some cases, they can sell the vehicle to recover unpaid amounts.

The lien acts as a security interest. The mechanic has a legal claim until the debt is paid.

A lien is a legal claim against property. Many people know about purchase-money liens from car financing. When you finance a car, the lender places a lien on the title. You must pay off the loan before getting a clean title. The lender can repossess if you stop making payments.

A mechanic’s lien works differently. Some people call it a garageman’s lien. It’s not tied to a loan. It arises when a mechanic repairs, tows, or stores your vehicle. You haven’t paid for the service. In most states, the lien takes effect when work begins. The mechanic can keep possession until they receive payment.

Mechanic’s lien laws vary by state. They typically apply to repair shops and body shops. They also cover tow yards, storage facilities, and similar businesses.

How Long Before a Mechanic’s Lien Is Placed?

In most states, the lien takes effect immediately. A mechanic’s lien starts as soon as work begins. The mechanic has the right to keep your car. They don’t need to record anything on the title yet.

Physical possession protects their claim. No one can buy the car without paying the mechanic first.

Recording the lien becomes necessary in certain situations. The mechanic wants to sell the car. They need to take legal action to collect payment. Most states require them to record the lien on the title. We’ll cover vehicle sales later in this article.

Mechanics may record a lien if they return the car. You haven’t paid in full yet. Several situations trigger this:

• You set up a payment plan but stop making payments
• You pay with a bad check
• You pay by check or credit card and issue a stop payment
• You take the car back without permission

Some of these actions may be criminal offenses. Your state’s laws determine the consequences.

How Long Before the Lien Shows Up on the Title?

The mechanic must notify others once they lose possession. Recording the lien requires filing paperwork with the state DMV. Some states use the department of transportation instead.

The timeline varies by state. Most states require mechanics to wait before recording. The waiting period typically ranges from 5 to 30 days. They must request payment first. Some states add more waiting periods before vehicle sales.

What Can You Do About a Mechanic’s Lien?

Your options depend on the situation. Do you agree with the repair costs? Was the work quality acceptable?

The Work and Price Are Fair

Pay the bill if repairs are complete and fair. Most states let you inspect the work first. Check that everything was done properly. You may be able to arrange a payment plan. The mechanic’s lien stays in place until full payment.

You Dispute the Work or Bill

You can challenge the lien in several situations:

• The work is incomplete or poor quality
• The mechanic did extra work you didn’t authorize
• The bill exceeds the agreed amount
• Someone else should pay, like an insurance company
• You didn’t authorize the service at all

Try resolving the issue directly first. The mechanic may offer a discount for unsatisfactory work. You may need to contact your insurance company instead. They may be responsible for the cost.

You may need to file a replevin action. A replevin action is a lawsuit to get your car back. You’ll need to submit a complaint with evidence. Gather these documents:

• Before-and-after photos showing poor or incomplete work
• A copy of the repair estimate versus the final bill
• Proof that you didn’t authorize the work

Expect to pay a filing fee. You may need to appear in court. Some people represent themselves successfully. Consulting an attorney is helpful for complex disputes. An attorney is especially valuable for insurance company disputes.

Can a Mechanic Legally Repossess or Sell Your Car?

Probably, but state laws vary.

Some states allow mechanics to repossess your car. Certain conditions must be met. Tennessee requires a signed work order or contract. The document must clearly state repossession is possible for nonpayment.

Many states allow mechanics to sell vehicles they possess. They can recover unpaid debts this way. State laws determine the sale type. Some require public auctions. Others allow private sales. Laws also cover timelines, notice requirements, and proceeds distribution.

Lien laws vary widely across states. Check with your state’s DMV for specific rules.

Will You Be Notified Before the Sale?

Maybe. State law determines notification requirements.

Most states require some notice to the registered owner. Some states require certified mail with proof of delivery. Others allow mechanics to publish a notice in newspapers. You may never see newspaper notices.

Many states require notifying lienholders too. Your auto lender must receive notice. Some states give lienholders an option to buy. They can pay off the mechanic’s lien. They become the new owner. The amount gets added to your existing debt.

Some states require court orders before sales. You may get the chance to contest the sale. Other states allow you to redeem the car. You can buy it back before the sale date.

How a Mechanic Files a Lien

Many states create automatic liens when work begins. Mechanics don’t need to record the lien immediately. They just need to keep possession of the vehicle. They usually don’t notify anyone else either.

Recording becomes necessary in certain situations. The mechanic wants to sell the car. They no longer have possession. They typically need to record the lien on the title. Recording happens with the state. People call this process “perfecting” the lien. It ensures their legal right is officially documented.

Requirements vary by state. Some allow online filing. Others require mailed or in-person paperwork.

What Paperwork Does a Mechanic Need?

Most states require specific documents. Exact requirements vary by state. Mechanics often need to provide:

• Proof that the work was authorized, like a signed repair contract or estimate
• Proof that the work was completed, like invoices or work orders
• Proof of the unpaid balance, showing the amount due
• Proof that the owner was notified, including when and how
• A statement confirming proper notice was sent to all parties

Some states require appropriate business licenses. Mechanics need these to enforce or file a lien.

When Does a Mechanic’s Lien Take Priority?

Multiple liens create a priority question. Who gets paid first if the car is sold?

Most states prioritize possessory liens. The lienholder has the car. Mechanics usually have possession when they place a lien. They often get paid before other lienholders. Your lender comes second. Mechanics may lose priority if they return the car.

Non-possessory liens follow the first-to-file rule. The first recorded lien gets paid first. Your lender’s lien usually comes before later liens.

Here’s an example. You finance a car. Your lender places a lien on the title. You take the car to a mechanic for repairs. You can’t afford to pay the bill. The mechanic keeps and sells the car. They typically get paid first. Any remaining money goes to the lender.

Another scenario: The mechanic releases the car to you. They later repossess and sell it. The lender usually gets paid first. Leftover funds go to the mechanic.

The sale might not cover all liens. Unpaid lienholders may sue you. You’ll owe the remaining balance.

Key Takeaways

A mechanic’s lien gives service providers the right to keep your car. You haven’t paid for the work they performed. They can keep your car until you pay. They can sell your car to pay off the debt.

A mechanic’s lien attaches even to financed cars. If the service provider sells your car, they usually get paid first. Additional money goes to the lender after. Mechanic’s liens are governed by state laws. Research your state’s rules to understand the process. Our partner Cambridge Credit Counseling can help if unpaid repair bills have created other financial challenges.

You can dispute charges if necessary. File a replevin lawsuit to get your car back. The mechanic must prove the charges were fair and authorized.