Colorado Car Sales Practice Test

Question: 1 / 400

What must be done when a vehicle with a lien is sold?

The lien is ignored

The seller keeps the lien

The lien must be paid off or the buyer must be informed

When a vehicle with a lien is sold, it is essential that the lien is either paid off or the buyer is fully informed about its existence. A lien is a legal claim against the vehicle, usually held by a lender, which means that the vehicle cannot be sold free and clear unless that lien is satisfied. Not disclosing the lien can result in legal repercussions for the seller and can create confusion or issues for the buyer after the purchase.

If the lien is not paid off before the sale, the buyer should be made aware that they are purchasing a vehicle that is not entirely free of debt. This transparency is crucial to ensure that the buyer understands the potential financial responsibilities associated with the lien, such as payments that may continue to be due or the risk that the lienholder could reclaim the vehicle if the debt is not settled.

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The buyer assumes the lien automatically

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