MADA fields regular calls on this topic: a customer authorizes a repair, the dealer completes the work, and the customer won’t pay. Or a vehicle simply sits abandoned on the lot with no value at all. Minnesota law gives dealers two different tools depending on the situation.

Option 1: Foreclose on the Mechanic’s Lien

Use this process when the dealer wants to recover money owed for repairs, service, or storage. MADA’s guide, Motor Vehicle Mechanic’s Lien (reviewed February 2025), covers the process in detail. Minn. Stat. §§ 514.18–.21.

Create the Lien

The dealer already holds the lien. Possession of a vehicle the dealer repaired, serviced, or stored creates it automatically — no filing required. But release the vehicle, and the dealer loses the lien for good. Minn. Stat. §§ 514.18–.19.

Hold the Vehicle 90 Days

The dealer must hold the vehicle at least 90 days after the repair bill becomes due before selling it. Minn. Stat. § 514.20.

Recover Lawful Charges

The lien covers:

•       Repair and service charges — parts and labor
•       Storage charges (capped at 15 days until the dealer notifies secured creditors)
•       Towing charges
•       Rental charges for a replacement vehicle provided during the repair
•       Reasonable disbursements tied to retaining and selling the vehicle

Notify Secured Creditors

The dealer must send certified mail to any secured creditor listed on the title at least 45 days before the sale. Give proper notice, and the mechanic’s lien pays out ahead of that creditor’s lien. Minn. Stat. § 514.20.

Choose a Sale Method

Licensed new and used vehicle dealers can run an expedited sale: notify the owner by certified mail at least 21 days before the sale date, then sell the vehicle wholesale or retail. This path waives any deficiency claim against the customer. Dealers who want to preserve that claim, or who lack an address for the owner, must use a sheriff’s sale instead.

A dealer cannot use the expedited sale to sell the vehicle to itself and title it in the dealership’s name. The expedited sale requires an arm’s-length sale to a bona fide wholesale or retail buyer — the dealer cannot be that buyer. If the dealership wants to title the vehicle in its own name, for example to use it as a loaner vehicle, the dealer must foreclose the lien through a sheriff’s sale and purchase the vehicle there instead. 

Apply Sale Proceeds

Pay expenses first (certified mail costs, sheriff’s fees, etc.), then the dealer’s lien. Pay any remaining funds to the customer or another entitled party, such as a secured creditor, on demand. Minn. Stat. § 514.20.

Transfer Title

For an expedited sale, submit the Notice of Sale, proof of mailing to the owner, and the buyer’s title application to Driver and Vehicle Services. For a sheriff’s sale, submit the Notice of Sale, an affidavit of service or publication, the sheriff’s report, and the buyer’s title application.

Use the Sample Notices

MADA’s guide includes two ready-to-use forms: the Notice to Secured Creditors and the Notice of Sale. Members can complete these directly to meet the statutory notice requirements.

Option 2: Tow an Abandoned, Worthless Vehicle

Use this process when the vehicle has no value and the dealer just wants it removed from the lot — no repair bill to collect, no sale to arrange. Minn. Stat. § 168B.055 governs the removal of an abandoned vehicle from private nonresidential property.

Send Notice Before Towing

The dealer must notify the vehicle owner by certified mail, return receipt requested, at least five business days before removing the vehicle. The notice must clearly state that the dealer will tow the vehicle if the owner doesn’t remove it by the stated deadline.

Include Required Vehicle Information

The notice must identify the vehicle by:

•       Registration plate number
•       Vehicle identification number (VIN)
•       Make, model, and color

Tow the Vehicle

Once the five-business-day notice period runs and the owner hasn’t removed the vehicle, the dealer may have it towed off the lot.

Which Process Applies?

Use the mechanic’s lien process (§§ 514.18–.21) when the dealer holds the vehicle for an unpaid repair or storage bill and wants to recover money through a sale. Use the abandoned vehicle process (§ 168B.055) when the vehicle has no value and the dealer just wants it off the lot. The two statutes serve different goals and follow different notice and timing rules.