What happens if the DMV forgot to put the lienholder on my car title?

UPDATED: Jun 7, 2011

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What happens if the DMV forgot to put the lienholder on my car title?

I qualified for a car loan on-line and then went to a participating dealer in MDand bought a used car with the voucher and some cash down. I brought the car back to NJ where I reside and I had to pay the sales tax and fees to register it (approximately $1400). The DMV processed it and I got a title. No lienholder was put on the title. It is in my name. Since then, I’m not really happy with the car. Can I go and trade it in without a legal problem? Can the third party bank force me to put them on the title as a lienholder?

Asked on June 7, 2011 under Bankruptcy Law, New Jersey


M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

I really think that you know the answer to this question already. Obviously a BIG mistake was made somewhere and I think it probably could have been expected given the transfer of the car from state to state.  Something went awry and this was the result.  Now, if you knowingly go and attempt to trade in the car without the lienholder being on the title you would be perpetrating a fraud and you could get in to big trouble here.  Yes, the lienholder has a right to be on the title.  I think that you need to make things right. Your unhappiness could go much farther than with the car if you are arrested.  Good luck.

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