Can I get an auto loan for a car with a salvaged title?


When buying a used car, you may come across some with salvaged titles. And while we normally recommend avoiding these branded vehicles, there’s no doubt that their low prices can make them appealing to many budget-conscious buyers. But what if those buyers can’t afford it? Can you finance a car with a salvaged title?

Finance a car with a recovered title

A used car dealership | Pablo Monsalve/VIEWpress via Getty Images

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The short answer is yes, you can finance a car with a branded title. For the uninformed, a salvaged title car is one that needs a significant amount of repairs to the point that the insurance company has written it off as not worth the cost of the repair. Cars can not only be salvaged from accidents, but also from theft, vandalism and flooding.

Although an insurance company can mark a car with a salvage title, it can still be repaired, inspected, and then given a “rebuilt” title. With a rebuilt title, the potential buyer may have a better chance of getting a loan, as the car will be deemed safer to drive at that time. However, finding a lender to finance the car could be a bit tricky.

Find a car loan for a car with a refurbished title

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View of a used car dealership in New York | Pablo Monsalve/VIEWpress via Getty Images

Getting an auto loan for a rebuilt car isn’t much different than getting one for an untitled car, however, you may need to research a little more. The Balance recommends going to your personal bank first, especially if you’ve ever had a car loan through them. In this case, your bank or credit union may be more likely to give you a loan for a rebuilt car because you already have a relationship with them. Of course, your current credit score, history, and down payment can play a role.

If you don’t have a good relationship with your bank or have never financed a car, finding a loan for a rebuilt title car can be somewhat difficult, but it’s not impossible. Rebuilt cars are generally considered high-risk vehicles since they have been rebuilt, but are generally not returned to their original standards. When looking for a loan, you can always check online for second or third tier lenders who will finance a car with a rebuilt title. If you find a loan, be aware that it could come with a very high interest rate, as many banks consider rebuilt cars a risk.

Bring the necessary documents to obtain a loan

A used car salesman helps customers.

A used car salesman helps customers. | Helen H. Richardson/The Denver Post

If you do end up finding a lender who will take out a loan for your rebuilt car, it’s a good idea to bring as much documentation as possible. This may include a statement from the mechanic that the car is roadworthy in addition to a statement from your insurance company. Chances are that if your insurance company covers the rebuilt car, you’ll be able to get a loan for it as well.

Of course, a valid driver’s license, bank statements or payslips and a good credit rating will also come in handy. However, if you don’t have established credit or are in a bad credit situation, having a co-signer is a good idea. Ultimately, getting a car loan for a car with a salvaged or rebuilt title is possible, but it might take a little more effort.

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