Yes, you can trade in a car with a lien…as long as you get the lien removed first. Depending on who holds the lien, this could be a smooth or tricky process.
The most common type of car lien
is when your car loan lender has a lien on your vehicle. If your vehicle is financed, your lender is a lienholder on your vehicle until your loan is paid off. To remove this type of lien, you have three options: Negotiate with the new buyer (or dealership) to pay off your loan
Transfer the loan to someone else
After the loan is taken care of, you’ll need to get a car title lien release from your lender or lien holder so your state’s DMV can clear the lien from your car title. When you’re the only owner listed on the title, you can start the trade-in process.
If the lienholder is a mechanic’s lien or child support lien, you’ll still have to pay what you owe before you can get the lien removed. No dealership or private party will buy your car with a lien on it, period.