Must a Towing Company Notify a Lien Holder?

Cars are towed for many reasons. Sometimes, it’s a parking violation. Other times, it’s committing a misdemeanor like driving without a license. Whatever the reason, you might be wondering if the towing company will notify your lien holder, which is the bank who financed the vehicle, if your car is towed.

The bank that financed your vehicle has an interest in the car. That’s why most states require a tow truck company or storage facility to notify the lien holder of towing. The last registered owner is also notified in most states. This protects all parties with an interest in the vehicle in case the vehicle owner doesn’t know the car was towed.

If the vehicle isn’t picked up by the owner, the vehicle can accrue large fees. These fees must be paid to get the vehicle out of the towing yard. If the vehicle owner doesn’t pay the fees, the tow company has the right to claim a lien against the vehicle. The lien is for the amount owed for the towing and storage fees. This puts everyone’s interest in the vehicle, including the bank's, at risk.

Check your state’s codes to find out when a lien holder is notified about a towed vehicle. For example, a lien holder might need to be notified within five working days of the vehicle tow. The tow company will retrieve documents on the vehicle from the Department of Motor Vehicles. These documents provide the legal owner’s name and address -- and if the car has a lien holder. The tow company uses this information to notify the lien holder of the towing and storage of the vehicle.

Pick up your vehicle and pay the appropriate fees to the towing company. Make sure to get a receipt. Your bank will require a copy of this receipt to ensure the towing company has been paid -- and that there aren’t any additional liens against the vehicle. Send a copy of the paid bill to your lender, and make sure they’ve updated your account.