Rebuilt Title Financing
Can I finance a rebuilt title car?
You can finance a Rebuilt Title.
However, much depends on the reason why the vehicle had a Salvage Title in the past,
and the damage it received. That is why it is necessary to check
vehicle history by VIN.
To start with, by the law, a rebuilt title means that the vehicle is a fully operable and roadworthy
vehicle with lower resale value due to previous damage. However, accessing the damage and how well
the repair was done is not easy. How can the bank know that the vehicle will even last until the end of the loan?
Given that, in most cases you can only finance about 50-60% or the purchase price - the finance company will not run the risk of possessing a vehicle with has low chance to be sold for money they lent you in case you are bankrupt. In addition, in case of an accident of theft the insurance company may agree to pay only 50-60% of the value (for example, if they weren't aware of the rebuilt title), which also means that rebuilt title financing deals are risky for the lenders. Your credit history will be the deciding factor because it's timely payments and not the car the bank or the financing company wants.
Which rebuilt cars can be financed?
Do banks finance rebuilt title cars? In the past, banks suffered significant loss from financing vehicles with salvage history they were unaware of.
Today, everyone can access vehicle history reports on any VIN online, at any moment.
For this reason, the banks will most likely finance rebuilt title vehicles with cosmetic damage (like, hail damage) or theft recoveries, as they dont't sustain severe damage to functional parts and will be operable util you pay off the loan. In Louisiana, many companies and banks will easily finance a rebuilt title vehicle for 50% of the loan value of the vehicle. According to some customers reports, it was not so difficult to finance a rebuilt title at Florida financial institutions provided that they don't show a Flood damage history on VIN reports, even though previously salvage Florida vehicles used to raise most of the red flags. However, those lucky borrowers didn't provide any additional information about the title or salvage history, only the VIN number, with the strategy "the less info - the better", and the company didn't request anything else.
So, if the company does not require to disclose any relevant information that affects the car's value, that may be an effective strategy. However, if you are obliged to disclose the branded title (for example, the questionnaire specifically asks if the vehicle has a branded title) you'd better do as required so as to avoid serious problems in future. In any case, the VIN is all they need to check the title and the history.
Companies and Banks that Finance a Rebuilt Title
In different states vehicles get salvage titles for different reasons and qualifications for issuing a rebuilt title also differ, as well as financing mechanisms. For example, in some states, like NY, the bank leaves the title to the borrower and never even sees it, and just puts a lien on it. So, in New York, getting financing for a rebuilt car seems quire easy . In other states, the title is kept at the financing company until you fully pay off the loan, and getting rebuilt title loans is more difficult. That's why the best way to learn if you can finance a car with a rebuilt title is to call the companies and the banks or send online requests for rebuilt car loans. There is a controversy: the bank wants a solvent borrower with stable income. Buying a rebuilt title vehicle may be a red flag all by itself, a sign of having financial difficulties (unless you are buying a premium class or luxury rebuilt car). Firstagain seems to issue financing on a rebuilt title without problems. BECU is also worth a try. Capital One used to finance rebuilt vehicles, however, some buyers report they no longer do. Worth a try, however.
In addition, you don't necessarily have to get an auto financing for a rebuilt title. If the car is really a great buy and you have a good credit score, you can request an unsecured personal loan. For many shoppers, that worked perfectly. Having a good credit score and stable income for an extended period of time will increase your chance to get auto financing for a rebuilt title.
Is it a good idea for you to finance a rebuilt title car?
Keep in mind that selling a rebuilt vehicle at a decent price is a big problem. Are you ready to pay out a credit for an asset that will then be a burden on your pocket? With a normal car, you have the car in your possession once the loan is paid and can sell it at a price deprecated depending on its age. With a rebuilt car, you will have a seriously devalued rebuilt car compared with what you are buying it for. Also consider the type of damage it suffered. If it wasn't serious, like surface damage or a theft recovery car without damage, its ok. But if it was in a severe accident, chances are that you will have to invest in repairs and maintenance much more than you expect, even if it has low mileage. Add this to you monthly payments to the bank. Once a car has an extensive damage, the car will never be the same again.