If you had to choose between a clean and clear car title and a salvage title, you would choose the clean and clear one every time. But did you know salvage titles often have significant value and they can still be used as collateral for a loan?
When a car title is marked as "salvage," that means the vehicle has been declared a total loss by an insurance company. At one point, the car was damaged and rendered seriously compromised, but it has now been repaired and declared roadworthy after being declared a total loss. Getting a car back on the road after it's deemed a total loss can include extensive inspections and repairs to ensure it meets all legal and safety standards. The standards for issuing a rebuilt title vary by location, but what happens if you want to take out a title loan using a salvage title?
The upside of a car with a rebuilt title is that it will usually be lower-priced than a similar car with a clean title when you initially buy it. That means even though your vehicle is salvaged, equity is still available and can be used as collateral for a title loan. The downsides can include a lower resale value and a harder time getting insurance, since an insurance company has already written the car off.
You might wonder whether rebuilt title loans are possible, but there are a few things to keep in mind.
Clean Title vs. a Salvage Title
If your vehicle has a clean title, it indicates it has not been significantly damaged or declared a total loss by an insurer. If you have a car with a clean title, it's usually easier to finance and insure. If you are considering buying a car with a salvage title, lenders may have stricter requirements or less favorable financing terms. As for insurance, coverage may be limited, or premiums may be higher.
How Can I Tell If My Car Has A Salvage Or Rebuilt Title?
There are different ways you can go about checking the title status of a car, including:
- Inspect the title certificate to see if the vehicle has a rebuilt title. In addition to the terms "rebuilt" or "salvage," you might also look for "reconstructed."
- Get a vehicle history report. These reports combine information from various sources, including state DMVs and insurance companies, to provide an in-depth vehicle history.
- Use the vehicle identification number (VIN) to research the car's history online. Every vehicle has a unique 17-character VIN that reveals details such as the manufacturer, recall history, and service record.
- Check with the California DMV to learn about the vehicle's title history. If you're looking for information on a vehicle title history that's not yours, you can complete a request for record information (INF 70) form.
A rebuilt title is usually issued by either the DMV or the equivalent agency where the vehicle is registered. Once a vehicle has been declared totaled and repaired, the person responsible for the repairs applies for a rebuilt title.
The process for obtaining a rebuilt title varies by jurisdiction. Still, you must apply to the DMV with documentation to prove the vehicle has been repaired and inspected.
Can You Get Salvage Title Loans?
It may be possible to get rebuilt title loans, also known as salvage title loans, but they can be more challenging than with a clean title. A title loan lender prefers a clean title because it means the collateral is less risky from their perspective, but some lenders will consider it.
A company offering title loans in California might provide a different loan amount and terms based on your vehicle's condition. Since cars with salvage titles have lower resale values than those with clean titles, it can affect your loan amount.
If you have a rebuilt title, you might also be required to provide more documentation to a lender so they can determine its condition and value. Vehicles that have a rebuilt title might have higher interest rates and fees that come with them when you get a bad credit title loan because there's the perception that they're a higher risk.
There may also be state restrictions or additional requirements for rebuilt title loans that you need to be aware of. If a lender is willing to extend funding to you, they might want to inspect the vehicle, and you could be asked to provide proof of repairs and other relevant documents.
Apply for a Salvage Title Loan with California Title Loans
Before getting a title loan for a rebuilt vehicle, make sure you've carefully considered all the terms and risks, and always look for other lending options first that don't involve tapping into your vehicle's equity. Also, check whether there's enough equity in your car, as even salvage vehicles can be used as collateral for a loan. If you'd like help with the process, contact California Title Loans at 855-339-1001 or apply online.