Legal Question in Insurance Law in California

My friend is acting as lender for a private party automobile purchase I am making. He wants to be the lienholder but not on title. I'm assuming this is to limit his risk exposure. Is the only way to be a lien holder in California to "perfect" the lien by listing the lien holder on the title as required by the DMV? Or is there another way? My insurance, with substantial limits of liability to satisfy my friend, should provide a shield to protect him in case of a lawsuit exceeding those limits of liability spilling onto him? Thanks. -Lee


Asked on 2/01/11, 12:16 pm

1 Answer from Attorneys

If he is only listed as lienholder on title, he has no liability exposure unless and until he repo's the vehicle. Do you really think commercial vehicle lenders have liability exposure just because they are listed as lien holders? That makes no sense. A perfected DMV lien is the only way to be a valid lienholder on a California vehicle.

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Answered on 2/01/11, 12:46 pm


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