How are vehicle titles transferred when there is a remaining loan on the vehicle in Wisconsin?

• A. The title can be transferred to the new owner immediately without lien release.
• B. The lien must be released, and the transfer can occur before the loan is paid.
• C. The buyer can take title with the loan still outstanding.
• D. The lender's lien must be released or satisfied, and the title can be transferred to the new owner once the loan is paid.

Answer: (D)

A loan creates a lien on the vehicle, so the title isn’t truly free until that lien is released. In Wisconsin, you can’t transfer a clear title to a new owner while the loan remains unpaid. The lender must release or satisfy the lien—typically after the payoff is received—and only then can the title be transferred to the new owner. At sale, the payoff is arranged, the lien release is obtained, and the DMV records are updated to show a lien-free title for the new owner. This ensures the buyer receives a clear title and holds the vehicle free of encumbrances.