Answer:
When financing a vehicle, the lienholder is the bank or company that loaned you money in order to purchase the car. The lender holds a lien against the car, giving them the legal right to take possession of the car if you fail to settle your debt. That institution's name will appear on the title of your vehicle and your car insurance policy for the duration of the loan. Buying or selling a car with a lien is perfectly legal, but the process takes more work, and it poses some inherent risks to the buyer.
Explanation:
A lien is the legal right to take possession of a piece of property if the debt underlying that property is not settled. A lienholder (also known as a lienor) is a person, company, or financial institution that co-buys that property or sells it to you on credit. For example, if your local bank writes you an auto loan to finance your car, they are the lienholder. You are the practical owner of the car. You have exclusive rights to use and even sell the vehicle, assuming you can pay off the loan.
But as long as the lienholder has a financial stake in your vehicle, they're the legal owner, and their name will appear on important documents. This is a different situation than leasing a car in that, when you lease a car, the lessor is the full owner of the vehicle, and you are merely renting it from them. You cannot legally sell a car you're only leasing.
