If you’re planning to apply for a title loan, but your car has a rebuilt or a salvage title, it can affect the amount of money that you’re able to borrow. A title loan depends on your car’s value, and since both those types of titles can lower your car’s value, they could also lower […]
If you’re planning to apply for a title loan, but your car has a rebuilt or a salvage title, it can affect the amount of money that you’re able to borrow. A title loan depends on your car’s value, and since both those types of titles can lower your car’s value, they could also lower what the lender is willing to loan you.
Want to know more about what you can expect when you get a rebuilt car title loan? This guide will have you covered on everything from the different types of car titles to adjusting your title loan amount expectations.
Clean, Salvage and Rebuilt – How the Different Types of Car Titles Work
Depending on your car’s history, it can have a clean title, a salvage title or a rebuilt title.
A clean title means that the car has never been declared a total loss. The car may have been in accidents in the past, but nothing significant enough for the insurance company to decide that it wasn’t worth fixing the car.
Both a salvage title and a rebuilt title indicate that at some point during its history, the car was damaged badly enough that it was considered totaled. What this means is that the repair costs exceed what the car would be worth when fixed. At this point, it gets a salvage title.
If someone decides to repair the car instead of allowing it to be sent to a junkyard, then it can get a rebuilt title. Laws on rebuilt titles vary from state to state, but it’s normal for an inspection to be required before the department of motor vehicles will issue the rebuilt title. In the inspection, the state must determine that the car has been adequately fixed.
Now, a car can still be drivable even though it has a salvage title and not a rebuilt title. It may not have passed the state’s requirements, or the owner could have just not bothered to go through the inspection process.
How Salvage and Rebuilt Titles Affect the Value of a Car
A car’s value drops significantly when it has a salvage or a rebuilt title. The amount that it drops will depend on the party who is assessing the value of the car. Vehicle value guides typically only provide value for cars with clean titles, and when people want to determine the value of a car with a salvage or rebuilt title, they usually take how much it would be worth with a clean title, and then take off anywhere from 20 to 50 percent.
Why are these cars worth so much less than cars with clean titles? The reason is that it’s almost impossible to tell what kind of shape the car is in. Even if it’s completely repaired, the structural integrity of the car could be permanently damaged by what happened. This means that buying a car with a rebuilt title is always a risk.
Getting a Rebuilt Car Title Loan
The process for getting a title loan is the same regardless of what type of title it has. You’ll need to do the following:
- Find a title loan company in your area. If you fill out our online application, we can find one for you and connect you with them.
- Go to the title loan company’s office and fill out the loan paperwork.
- Give the title loan company your car title after they inspect your vehicle to evaluate its condition.
After that, you’ll get your loan. As far as the requirements to get a title loan are concerned, you’ll need:
- Your government-issued ID
- Your car title
- Your car
There’s no change in how the loan works when it comes to a rebuilt car title loan or salvage car title loans. The only difference will be the amount that the lender is willing to loan you.
When a car has a clean title, the lender will look it up in a vehicle value guide and assess its condition. They will then estimate a current market value for the car and issue a loan for a percentage of this amount, usually in the 30 to 50-percent range. Of course, if state law sets a maximum title loan amount, the lender won’t exceed that.
If your car has a salvage or rebuilt title, expect the lender to cut its current market value, potentially by up to 50 percent. You can still get a title loan, but the lower value of your car means you’ll be able to borrow much less.
A title loan is still a fast loan option with plenty of advantages over other types of loans, and that doesn’t change if your car has a rebuilt or salvage title. You just need to plan for borrowing less so that it doesn’t catch you by surprise. If you look up your car in a value guide, cut its value in half, and then expect to get a title loan for 30 to 50 percent of that.