Selling a junk car that still has a lien in Indiana

Deal with the lien first. In Indiana, the lender’s claim stays on the title until the loan is paid and the lienholder releases it, and a buyer who takes the car before then is buying a problem. The good news is that the law puts a clock on the lender: ten business days after your final payment, in most cases.¹

Nothing here is a substitute for a call to your lender. It’s the map of what Indiana requires on each side, so you know what to ask for.

Can you junk a car that still has a lien in Indiana?

Not cleanly until the lien is released. When the loan is paid, Indiana gives the lienholder ten business days to note the discharge on a paper title and deliver it, or ten days to release an electronic lien. A seller must disclose every lien when signing the title over, and a no-title scrap sale needs a written lien release.

What your lender owes you after the last payment

Indiana Code 9-17-5-1 splits the rule by the kind of title.¹

Paper title. The lienholder must “note the discharge on the certificate of title over the signature of the holder of the lien” and deliver the title to you, or your agent, within ten business days of receiving the final payment.

Electronic title. The lienholder must electronically release the lien within ten days of the final payment, and notify you within ten business days, including the date the lien was satisfied.

A lienholder that misses these steps commits a Class C infraction.¹ That’s a useful sentence to have in your pocket if a release is dragging.

What you sign when you sell

When you sign an Indiana title over, the endorsement includes a statement of all liens on the car. Indiana Code 9-17-3-3.4 requires it, and leaving required information off is a Class B infraction.²

In plain terms: you can’t sign the title over and stay quiet about a loan. If the lien is paid but still printed on the title, the lender’s noted discharge (or its electronic release) is what shows the buyer it’s gone.

A lien and no title

This is the hardest combination. Picture it: the loan’s paid off, the release was mailed years ago, and the title is lost.

Two documents come into play:

• For a certificate of authority (the BMV form that lets a salvage recycler take a car without a title), the BMV asks for proof of lien release if there’s a lien. The release has to be signed by an agent of the lienholder and show the titled owner’s name, the date the lien was released, and the car’s year, make and VIN.³
• At the sale itself, the recycler records your signed statement that there are no liens on the car.⁴

So before anything else, ask the lender for a written release with those details on it. Our guide on junking a car without a title in Indiana explains the certificate of authority in full.

Why a duplicate title won’t clear it

Say the lien is paid, the title is lost, so they order a duplicate expecting a clean one. The BMV says a duplicate title transaction “cannot change any information (owners or liens).” It takes an amendment to take a released lien off, and duplicates can’t be issued on electronic titles at all.⁵ More on that in our guide to getting a duplicate after a lost Indiana title.

If the loan isn’t paid off yet

Then the lender still has a say in what happens to the car, and the conversation starts with them: the payoff amount, and how they want to be paid before they release the lien. We don’t handle loan payoffs, so we won’t pretend to explain a lender’s process here.

What we can do is tell you what the car is worth as scrap, which helps you decide whether selling it covers the payoff. If you’re thinking about selling a junk car in Hammond once the lien is cleared, send us the details and mention the loan when we call. For everything else about selling a junk car in Hammond, the front page has the short version.

Footnotes

1. Indiana Code 9-17-5-1, lienholder duties after final payment. Text read on FindLaw, current as of January 1, 2026. ↩ ↩² ↩³

2. Indiana Code 9-17-3-3.4, endorsing a certificate of title on sale. FindLaw, current as of January 1, 2026. ↩

3. Indiana BMV, Certificate of Authority application checklist (PDF), proof of lien release. ↩

4. Indiana Code 9-32-9-29(b), records a salvage recycler keeps. FindLaw, current as of January 1, 2026. ↩

5. Indiana BMV, Duplicate Title Application. ↩

Questions

Is it hard to sell a car with a lien?

It's slower, not impossible. The lender's interest has to be released before the title is clean, so the work is getting the loan paid and the release on paper. Once that's done, it sells like any other car.

How do I remove a lien from my car title in Indiana?

Pay off the loan. The lienholder then has ten business days to note the discharge on a paper title and deliver it to you, or ten days to release an electronic lien and ten business days to tell you it did.

What if my lender doesn't release the lien in time?

Missing those deadlines is a Class C infraction for the lienholder under IC 9-17-5-1. Start by contacting the lender in writing with the payoff date.

Can a duplicate title remove a lien?

No. The BMV says a duplicate title transaction cannot change owners or liens. Removing a released lien takes an amendment.