![]() ![]() Why You Need a Letter of Permission from the Lienholder The policyholder would only receive the remaining amount, after the balance of the loan is fully paid. This is because the lienholder would be the first to receive an insurance claims payout after a loss, instead of the policyholder, also called the named insured. ![]() When talking about insurance, the lienholder is often referred to as the loss payee on the insurance policy. Once the loan on the vehicle is paid, the lien is removed, and then the title is transferred. Meaning the lienholder is still the owner of the vehicle until the loan is paid off. Whenever there is a lien on a vehicle, the lienholder maintains a legal financial interest in that vehicle until the loan is completely paid off. If you have ever taken out a loan to buy a car, truck, van, SUV, motorcycle, motorhome, travel trailer, or other type of vehicle, then a lien was placed against that vehicle. It is common to borrow money from a lending institution or individual when purchasing a motor vehicle. If you do not own the vehicle that you are planning to drive to in Mexico, it makes sense to make the necessary arrangements to get the letter before you depart. It is better to know if you will need a letter of permission before beginning your trip.
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