When a vehicle is bought with finance, the lender records a lien against it. The lien gives the lender the right to repossess if the borrower defaults, and it stays attached to the vehicle rather than to the person.
That last point is what catches buyers out. If you buy a vehicle with an outstanding lien, the lender can still repossess it from you even though you paid the seller in full and did nothing wrong.
Lien records live in state and provincial registries rather than in vehicle history databases, and the depth of what is published varies by jurisdiction. In Canada the personal property security registries are the authoritative source.
Why it matters
An undischarged lien is one of the few defects that can cost you the entire purchase price and the vehicle.
How to check it
Search the official registry for the state or province where the vehicle is titled, and ask the seller for a written payoff letter from their lender before completing.
Does this apply to the car you are looking at?
Run the VIN or plate and see what is actually on record.
Related terms
Definitions are general guidance, not legal advice. Title rules, total loss thresholds and inspection requirements are set by each state and change over time, so confirm the position with the motor vehicle agency for the state the vehicle is titled in before relying on it.