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Under what scenario could a lien holder of an automobile be held liable in the event of a collision involving that automobile?

Los Angeles, CA |

I have a lien on someone's automobile. If that individual gets into an auto accident, is there any conceivable scenario in which I as the lien holder on the vehicle become liable for damages?

Attorney Answers 5


It is very unlikely that you would be held liable as a debt holder on a vehicle, as only the owner or user who causes damage or loss to another can
Be liable in Tort for the damage caused. Make sure your not in title( as an owner or co- owner as sometimes finance companies make ask you to sign as co- owner and not just co borrower. Check All original paperwork that gave you lien.
If not by a loan, how did your Lien arise?

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Unless you are an owner, there wouldn't be liability.

Licensed in PA & NJ. 29% Contingency Fee. Phone: 215-510-6755

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Assuming the "lien" interest is just collateral on a financial obligation the car's owner woes you, you do not assume any ownership interest unless and until the owner defaults on the obligation and you attempt to "perfect your lien." Since you are not an owner, you should not have any liability just because you have the lien.

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As long as you are not also a co-owner, I see little chance of you being found liable for any accident. Think about it. Do you see thousands of Banks being drawn into automobile personal injury litigation simply because they have loaned the money that bought the car and they have a lien on the car?

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Mr. Lundeen is licensed to practice law in Florida and Vermont. The response herein is not legal advice and does not create an attorney/client relationship. The response is in the form of legal education and is intended to provide general information about the matter within the question. Oftentimes the question does not include significant and important facts and timelines that, if known, could significantly change the reply and make it unsuitable. Mr. Lundeen strongly advises the questioner to confer with an attorney in your state in order to ensure proper advice is received.

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As a lien holder, and not the owner or driver of the vehicle, you shouldn't have any liability for the collision and damages.

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