Oregon auto repair shops to post bond with DMV soon before claiming “mechanic’s lien”



SALEM, Ore. (KTVZ) – Disputes over payment for auto repairs can sometimes cost vehicle owners and auto mechanics money, time, and in some situations, the car itself.

The 2021 Oregon legislature passed a law to create a financial respite for these disputes under Bill 2311. The new law will come into force on January 1, 2022.

Car owners don’t have to do anything, but auto repair companies need to be prepared.

Under current Oregon law, if an auto repair company does not receive payment for repairs to a vehicle, it has the right to apply for a lien with possession through DMV and sell the vehicle to recover its costs. This “mechanic’s privilege” is based on Oregon Revised Statute 87,152.

Under HB 2311, effective January 1, 2022, auto mechanics must first have an irrevocable bond or letter of credit in the amount of $ 20,000 deposited with DMV before they can apply for a mechanic‘s lien. This protects vehicle owners in the event that a mechanic’s privilege is invalid, DMV said.

As of January 1, DMV will not accept applications for a mechanic’s lien without the bond or letter on file, unless the applicant:

  • is a franchised dealer, as defined in ORS 650.120 (5);
  • is a manufacturer, as defined under ORS 650.120;
  • holds a towing company certificate issued under RHA 822.205; Where
  • is a national auction company titling the vehicle in accordance with ORS 87.152 (3).

Those required to post a bond or letter of credit must certify to DMV annually, in writing, that the bond or letter remains in effect.

If you are a mechanic or own an independent auto repair shop and need more information about filing a Mechanic’s Lien with DMV, please call DMV Customer Support at 503-945-5000 or 503 -299-9999 in Metro Portland.


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