Can dealership hold title if car traded in has a lien on it?

Yes, a dealership can hold the title of a traded-in vehicle that has a lien on it, but they typically need to settle the lien before transferring ownership. The dealership will usually pay off the remaining loan balance to the lienholder as part of the trade-in process. Once the lien is cleared, they can obtain a clean title to sell or resell the vehicle. It's essential for the seller to communicate with the dealership about the lien details to ensure a smooth transaction.