2021 GMC Yukon owner uncovers secret $1 dealer lien preventing him from selling

Minhas landed a new job in Toronto, Canada, forcing him out of his home in Edmonton. He decided that his massive GMC Yukon wouldn’t be the best choice to move to the big city. When he tried to sell his 2021 GMC Yukon, Harvey Minhas discovered a $1 lien on his SUV from the dealership where he bought it just a year ago.

2021 GMC Yukon Denali | GM

What does it mean to have a car with a lien on it?

A car lien essentially acts as an insurance policy for lenders. When you take out a loan to buy a new or used car, a lender wants to make sure it’s protected in the event of a payment default.

The car you buy has a lien on the title until you fully pay off the car. Not only does a lien act as insurance for a lender, but a lien also allows a creditor to repossess your car if you fail to repay your loan.

Although Minhas paid for the car in full, the hidden $1 lien prevented him from selling the Yukon. According to GM Authority, after reviewing the fine print, it discovered a clause stating that the SUV could not be sold, transferred into ownership or exported from Canada for 12 months after purchase.

“They said that even if you sold it, it could end up in the hands of an exporter, and so we don’t want this vehicle crossing the border,” Minhas said, per World News.

Why would a dealer put a hidden lien on a car?

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It’s clear that in this current market, dealers would prefer fewer people selling cars privately. With the shortage of used cars, private sales are stocking dealerships. According to Motor Dealers’ Association of Alberta president Gerald Wood, clauses like the one on the 2021 GMC Yukon are typically reserved for super-high end models. But on something like a GMC Yukon, the practice is anything but unheard of.

“It’s really done to make sure we can protect price levels in Canada so that Americans don’t come to Canada to buy the vehicle,” Wood said.

That doesn’t seem like a very far-fetched idea considering the tough market and resellers. However, that also leaves Minhas in a pretty tough spot, especially considering the Yukon is fully paid.

“Anyone’s financial situation or situation in general can change at any time and mine did, and I don’t want anyone else going through the same thing as me,” Minhas said.

How can you verify a lien on a car?

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This GMC Yukon situation is a good reminder to check all loan documents carefully. Although this privilege has apparently been hidden, the buyer still needs to know what he can do with his property.

Even outside of dealerships, private buying can carry similar risks. Much like carfax or other VIN-related information, there are many online VIN lookup tools that can alert you to a car’s title status before you buy it.

RELATED: How Do You Trade In A Car That’s Not Paid For?

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