When a watercraft or outboard motor covered by a certificate of title is scrapped, dismantled, destroyed or changed in such manner that it loses its character as a watercraft or outboard motor, or changed in such manner that it is not the watercraft or outboard motor described in the certificate of title, whoever is named as owner in the last certificate of title shall promptly cause the certificate to be mailed or delivered to the department. Thereupon the department shall, with the consent of any lienholders noted on the certificate, cancel the certificate.