Your Last Payment Cleared. DMV Still Sees the Bank.
A paid off loan does not clear a California title on its own. Until the lender gives up its claim, DMV records list the bank or finance company as the legal owner, and DMV will not remove that name without a release. The car stays tied to the loan on paper, even though you owe nothing.
A lender can release the lien in a few ways. One of them is a notarized REG 166, the form DMV accepts in place of the lender’s signature on a paper title. It is short, but it only works for certain cars, and it needs the lender’s signature and a notary stamp.
How the REG 166 Lien Release Works
On a financed car, two parties appear on the title. You are the registered owner. The lender is the legal owner, which DMV also calls the lienholder. The lien is the lender’s legal claim on the car until the loan is paid.
DMV calls this form the Lien Satisfied/Legal Owner/Title Holder Release. An authorized person at the lender signs it to say three things: the loan is fully paid, the lien went to no one else, and the lender gives up its interest in the vehicle or vessel. A notary public then confirms who signed. The notary checks identity only, not whether the statements are true.
The form does not replace your title. DMV uses it with your title paperwork and the transfer fee to issue a new title and registration card in your name alone.
Pick the Right Release Before You Call the Lender
Lenders release liens four ways. Which one you need depends on your title and your car’s age.
- The lender signs the paper title. The legal owner signs line 2 of the California Certificate of Title. Look at line 2 on your title first. If the signature is there, you may need nothing else.
- The lender releases it electronically. Some loans sit in DMV’s electronic lien and title program. After your final payment, the lender sends the release to DMV, and no paper title exists. Make sure DMV and the lender both have your current mailing address before you pay the last installment.
- The lender signs a notarized REG 166. DMV says it can stand in for the legal owner’s signature on the title.
- Your title is lost. You file a REG 227 application for a duplicate title. The legal owner’s signature on that form must be notarized, and a notarized REG 166 can take its place.
Who Can Use the REG 166 Form
Check four things before you ask the lender to sign.
- The loan is paid in full, and the lender did not assign it to another party.
- The car has a paper title. The form cannot be used for a paperless title.
- The car is not in the newest two model years. For a car that new, DMV says the lender must release its interest on the Certificate of Title itself.
- A notary will witness the lender’s signature. The only exception is an insurance company that files the form to get a Salvage Certificate under California Vehicle Code section 5752.
DMV words the age limit two ways. The form excludes cars two model years old or newer, and DMV’s legal owner page speaks of cars three model years and older. If your car sits near that line, call DMV at 1 800 777 0133 before you ask for anything.
Filling Out the CA DMV REG 166, Section by Section
Download the PDF from DMV. You can type on screen, or print it and write in black ink. Fill in the first two sections yourself, then send the form to the lender.
- Section 1, vehicle or vessel. Enter the license plate or CF number, the make or builder, the year model, and the VIN or hull number. Copy the VIN exactly as it appears on your title.
- Section 2, registered owner. Print your name as it appears on the title, registration, or loan contract. Use last name, first name, then middle name.
- Section 3, lienholder. The lender fills this in. It gives the name of the bank, finance company, or person who held the lien, an address, a mailing address if different, the date, and a daytime phone number. An authorized agent signs and prints their name and job title.
- Section 4, notary. Only the notary writes here. Leave it blank.
The notary section says the signer personally appears before the notary. That means the lender’s agent signs Section 3 in front of the notary. Do not ask for a signature ahead of time and a stamp later.
Asking the Lender for the Release
Keep your VIN, loan or account number, and payoff date in front of you when you call. Then ask three things: which release method the lender uses for your car, whether it will sign DMV’s form, and where it will send the signed original. Write down the date and the name of the person who helped you.
A bank or finance company signs through an authorized agent, so expect the form to pass through a loan or title department. If a private person lent you the money, that person signs and prints their own name. The form covers “individual(s)” as well as companies.
Sending the Release to DMV
Mail or bring the notarized form with your California Certificate of Title and the transfer fee. If your address changed and DMV does not have the new one, DMV’s page on changing a legal owner says to line out the old address on the title and write the new one beside it.
DMV lists DMV, PO Box 942869, Sacramento, CA 94269 for title paperwork. Call 1 800 777 0133 to confirm the address, or to ask whether your case fits an office visit better. Once DMV has everything, a new title issues in 10 to 15 calendar days. When it arrives, read the owner name, the VIN, and the lienholder line. The lienholder line should be empty.
If the Lender Closed, Merged, or Cannot Be Found
Look up the lender in DMV’s Financial Institution Listing on dmv.ca.gov. DMV points you to its Financial Institution Listing Facts page when the lender shows as “Closed” or “No Information Available,” or when it is not listed at all. Follow that page, because the next step depends on what the listing says.
When the lender is open but slow, ask for the release in writing and keep a copy. Include your name, the VIN, and the date of your final payment.
What the Release Costs
DMV charges nothing for the form itself. DMV’s fee page lists a $15 transfer fee, and you pay a duplicate title fee if you must replace a lost title. Notaries set their own prices, so ask before you go.
DMV’s ownership pages say transfer fees are due within 10 days, and penalties begin when payment does not arrive within 30 days. Send your packet soon after the lender signs.
Frequently Asked Questions
Can I sign the lien release myself?
No. You fill in the vehicle and owner sections. An authorized person at the lender signs Section 3, and a notary completes Section 4.
Does a lien release form have to be notarized?
Yes. The form says it must be notarized. The only exception is an insurance company that files it to get a Salvage Certificate.
My loan was electronic. Do I need a paper release?
DMV says the form cannot be used for a paperless title. With an electronic lien and title, the lender sends the release to DMV after your final payment, and DMV issues a new title and registration card that show you as the only owner.
What if my lender went out of business?
Check DMV’s Financial Institution Listing. If the lender shows as closed, has no information, or is not listed, follow DMV’s listing facts page. Call DMV at 1 800 777 0133 if you are unsure.