Key Takeaways:
- Salvage title loans are a possibility, but they are challenging to get
- Most insurance companies won’t insure a car with a salvage title
- You may be able to get a rebuilt title if you have the car repaired
- Montana Capital offers salvage title loans to help in your time of need
If you have a vehicle the insurance company deemed a total loss, you may wonder if you can borrow money from it in an emergency. While most lenders will not let you borrow money against a vehicle you cannot drive, some title loan lenders allow it in rare circumstances.
Here’s everything you must know about salvage title loans.
Are Salvage Title Loans Possible?
You may be able to get a salvage title loan, but the requirements are often stricter, and the loan amounts are lower. Because title loan lenders rely on a vehicle’s value, they don’t have much to lean on when you have a vehicle with a salvage title.
Good to know: What is a Salvage Title? A salvage title is a title on a car that’s been severely damaged in a car accident or other type of incident, usually with 75 to 90% of the car damaged. The damage is severe enough that the insurance company deems the car a total loss. Typically, these cars are only good for their parts, but some mechanics can turn them back into workable vehicles with a rebuilt title.
The Problems You May Face Applying for a Title Loan With a Salvage Title
Two major problems exist when applying for a salvage title vehicle loan: insurance coverage and the lack of value.
- Insurance companies won’t insure the vehicle: Most insurance companies won’t take a risk and insure your vehicle because they are rarely driveable and can cause more problems.
- The car’s value isn’t enough to borrow against: Even if you can get insurance, its value will drop significantly, making financing challenging.
How to Remove the Salvage Title and Get a Rebuilt Title
If your car was deemed a total loss, you may wonder if you can ever drive it again.
The answer is yes, but not all cars qualify. First, you need a professional to repair the vehicle, remove any hazards, and ensure it’s safe to drive on the roads. Next, you typically need to have the vehicle inspected by a state-approved inspection facility to ensure all repairs were properly completed and the vehicle is safe for the road.
If approved, you can apply for a rebuilt title. Keep in mind that there’s no guarantee the vehicle will have a higher value or that you’ll be able to get an auto loan against it.
What do Lenders Look For on a Car Title Loan Application?
When applying for a car title loan, lenders look for the following:
- Ownership of a vehicle with adequate value
- Proof of enough income to cover the loan payment
- Proof of residency in the state you’re applying for the loan
- Proof of insurance, especially on a car with a salvage title
How to Increase Your Chances of Approval for a Salvage Title Loan
The key to getting approved for loans on salvage title cars is to provide adequate documentation proving the repairs and that the vehicle is safe. Keep a paper trail of all work completed, and have proof of the state’s approval if they allow the car to have a rebuilt title.
Lenders need to know that the car is safe and has enough value in it should you not make your payments. Usually, securing a salvage vehicle title loan is challenging if you don’t complete any vehicle repairs.
The Benefits of A Salvage Car Title Loan
Like any title loan, there are some benefits to consider when looking for salvage title loans online:
- Fast cash: Title loans often fund the same day or by the next business day if you can provide adequate documentation that allows the lender to approve your loan quickly.
- Bad credit is okay: Title lenders don’t focus on your credit history. You can have bad credit and still qualify as long as you can prove you have the income to cover the loan.
- Online approval process: If you have the necessary documentation, you can typically apply for loans on salvage titles online. This allows you to complete the process fast.
Get a Salvage Title Car Loan in California
If you’re looking for a salvage title car loan in California, contact Montana Capital today. Our representatives will work closely with you to help you get loan approval on a salvage title. Our car title loans are fair, fast, and able to help you during a financial emergency.
FAQ
Does a Salvage Title Affect Getting a Loan?
In most cases, yes, a salvage title affects your ability to get a loan. However, you might find exceptions with title loans, especially if you have the vehicle repaired and get a rebuilt title so the car is safe to drive on the streets.
What are the Cons of Buying a Salvage Title Car?
There are many downsides to buying a salvage title car. The largest disadvantages are that they are hard to insure, challenging to finance, and often have serious safety concerns. Before buying a salvage title car, be sure to have a professional inspect it and ensure you won’t use the vehicle for loans from traditional lenders because they are hard to get.
How Does a Salvage Title Affect Value?
Most salvage vehicles are worth 20 to 40% less than their clean title value, but the amount of value they lose depends on the type and extent of the damage and the overall value of the vehicle in good condition.
Final Thoughts
Salvage title loans are a possibility in the right circumstances. The key is to prove the vehicle is safe and worth enough to borrow against. You must also prove you can comfortably afford the loan payments, as lenders take a large risk in approving these loans.
If you want to learn more about salvage title loans, contact us today.
Written by
Samantha Hawrylack
Samantha Hawrylack writes for our company and is an expert in personal finance. Sam received her Bachelors of Science in Finance and her Masters in Business Administration from West Chester University of Pennsylvania. She began her career in the financial services industry and shifted to an entrepreneurial role where she could directly impact clients. Sam has an impressive background in personal finance and business management.