Can I Get a Loan for a Rebuilt Title Car

Do you want to buy a used car?

Then you may come across cars that have rebuilt titles. This can be on a dealer’s lot, or it can also be for private sale. A rebuilt title can be given to a car when it is repaired, when it used to have a salvage title. 

So what is so special about these cars?

Rebuilt cars are a lot cheaper. So, it is profitable to buy them over cars with clean titles. But they also carry some risks. This is why it can be a little harder to get a loan for these than for other used cars. You should know some important points before applying for a loan for a rebuilt title car.

Why are rebuilt titles given?

Your car title or the registration certificates prove that you are the genuine owner. Brand-new cars will have clean titles. Then, if it has an accident and gets damaged, it cannot be driven. Then it can get a salvage title. This means that your car is no longer safe to drive. It cannot be registered.

But a salvage title does not mean that the car ends there. It can be rebuilt and driven again by someone else.

Damaged cars with salvage titles can be repaired and then given rebuilt titles. Then, the next process is that the cars have to pass an inspection. If it is decided they are safe to drive, it can then be bought again.

You can buy rebuilt cars and then register them in your name. You may see both salvage and rebuilt titles written as “branded” titles. This means that there is something different about the car.

Buying rebuilt title cars

So, why is buying a rebuilt title car good for you?

There is a price advantage. They may be 20% to 40% less costly than clean title cars. But you will also have to look at the added risk. The troubles that have plagued the car can mean it will need more and more repairs in the future. Then you will have to deal with extra costs anyway.

So, there is some work to do before you go for a rebuilt title car. Find out why it was given a salvage title in the first place. If the car was totally flooded, then it may have more issues in the future. 

It is a good idea to have a trusted mechanic and body specialist who can inspect the car properly. Then you can decide to buy it.

How to get a loan for a rebuilt title car?

You may face some challenges in getting a loan for a rebuilt title car. Lenders may be a little reluctant at first. So, what are the reasons?

The main reason is the high risk. Lenders are always looking to manage the risks related to lending. A rebuilt car is more likely to break down at some point. So, it will lose value in the future. If the car is very costly but cannot run, then you may default on the loan. Then the lender will need to take the vehicle and sell it to avoid a loss. If the car is not running, they can sell it to make up for their loss.

You can try a few things that can help you get a loan for a rebuilt car. It is always a good idea to get and present the statement of a mechanic. This person is the one who has checked the car. That person has to declare that the car is safe and in good condition to drive. You will also have to bring a statement from your insurance carrier. This will indicate that they are willing to insure the car you want to buy. If you have good credit, this may help even further. This is because it decreases the risk for the lender.

Important facts to know about rebuilt title car loans

If you want to buy a rebuilt title car, you can follow the steps we have mentioned right here:

But you have to remember that despite all the precautions you take, financing such cars is a little complex. So, you have to understand some factors that come with financing a rebuilt title car –

Finding a lender who is willing to give you a loan for a rebuilt title car can be a little problematic. So, you have to be patient and persistent with your offers. Make sure that you can produce all the documents needed and that you have carefully checked the car’s condition.

Lenders can charge higher interest on loans for rebuilt title cars than they do for clean title cars. So you have to be prepared for that as well, since there is a high risk involved with financing a rebuilt title car.
Always remember that your rebuilt title car may undergo many issues of damage in the future. As they can get damaged and malfunction easily, they will lose value in the future. Therefore, you may not be able to sell such cars for a good price if you need the money. If the car is worth less than what you owe on it, you can go upside down on the car loan. This can lead to a tremendous loss on your side.

The Bottom Line

Buying rebuilt title cars can be less costly than brand-new cars. But they also involve some risk. Depending on the history of the car, it may or may not experience issues of malfunction in the future. But if you can find a car you like, then let it get checked. If a good mechanic says it is in running condition, you can go for it. Then you may be able to find a lender to give you a loan for the car.

Happy Reading!!!!!