Can You Get a Title Loan with a Salvage Title?

Title Loan with a Salvage Title

A car title loan is known to be one of the common methods of borrowing money these days. This type of secured loan allows you to get the required funds by using your vehicle’s clear title as collateral. But how about taking out a loan if your car has a salvage title?

If you’re willing to purchase a salvage title car and wondering whether it’s possible to finance it, the good news is that, technically, you can. However, there are several crucial factors you need to consider before applying for a salvage title loan.

Read on and find all the necessary information about salvage title loans and how to get one.

What Is a Salvage Title?

Every vehicle has its own car title – a legal document issued by a state government that establishes a person or business as the authorized owner of a vehicle. If your car title is marked as ‘salvage,’ it means that your car has been totaled as a result of an accident or other significant damage, like fire or flood. Theft is also among one of the leading causes of a salvage title.

State law requires a vehicle to be declared salvaged when the level of damage caused to a car reduces its value by a considerable percentage. The exact percentage varies across the states – for example, the threshold in Oklahoma is 60%, while in Oregon, it reaches 80%. It’s crucial to always check your state’s laws on salvage title vehicles for more information.


Salvage Title and Rebuilt Title – What’s the Difference?

When people are searching for a used car, they often get confused between the terms ‘salvage’ and ‘rebuilt.’ Generally speaking, a rebuilt title (also referred to as ‘reconstructed’) is issued to a car that was previously a salvage vehicle but has now been repaired and made ready to get back on the road again. 

In most cases, a salvage title vehicle is not allowed to be driven due to its unsuitable condition. On the other hand, a rebuilt car is allowed on the road but only after a thorough vehicle inspection. 

Still, the definition and guidelines of a salvage title and rebuilt title are interpreted differently, depending on the state.

Is It Worth Getting a Salvage Car?

Salvage title vehicles are commonly tempting propositions to purchase due to their often surprisingly low prices. A decision about buying a salvage car should be well thought out, and many factors should be considered prior to purchasing such a vehicle.

One of the most relevant aspects of owning a salvage vehicle is the area you reside in. Certain states don’t legally allow salvage cars on the roads – that’s why checking your state’s DMV guidelines is crucial before making the final decision. 

If you’re considering buying a vehicle with a salvage title, there are several other factors worth taking into account. These include:

  • A salvage title car may not be safe to drive. The functionality and safety of a vehicle are crucial when it comes to responsible driving. If you’re buying a car that has been severely damaged, it may develop major safety issues that will need to be taken care of.
  • It lacks a warranty. Salvage vehicles are no longer covered by the manufacturer’s warranty, and extended warranty companies may charge a lot for comprehensive warranty coverage. In case you need any repairs, you may need to pay for them yourself.
  • It may require significant repairs. Depending on the level of damage caused to your vehicle, it may need extensive (and expensive) repairs. Serious damage can also cause systemic failures in the future. For example, chassis damage can cause issues with suspension or steering. 
  • Financing a salvage title car may be more expensive. In a clear title car loan, the lender uses the vehicle as collateral, which means that they can reposses it and sell it in case you’re unable to make repayments. When it comes to a salvage title car that has low value, it’s more difficult to sell and therefore poses a bigger risk to the lender. For that reason, you may be subject to paying higher interest.
  • It may be hard to find insurance coverage. You may have difficulties obtaining car insurance for your salvage vehicle. An insurance carrier may be willing to offer you state-required minimum liability insurance coverage for a rebuilt title car. 

Salvage Title Cars Also Have Their Advantages

On a more positive note, getting a salvage title vehicle can be a great idea, as long as you put it to good use responsibly. 

If your car with a salvage title is thoroughly restored and passes a mechanical safety inspection, you can get an excellent means of transport that is both safe and inexpensive.

An affordable salvage vehicle has a variety of uses. These include:

  • Backup car. If you have a clear title vehicle that is not available to use at a specific time, you can always rely on your salvage car whenever you need or feel like it.
  • Vacation car. If you have a place you regularly fly to for a vacation, you can use your salvage car to move around. Next time you go to your holiday destination, you will not have to worry about renting a car, and therefore, you will save money.
  • A source of car parts. Apart from using your salvage car for driving, you can also make use of its parts for another vehicle you own, especially if they are the same model. 

Can You Get a Title Loan on a Salvage Title?

In many cases, you will be able to take out a title loan on a salvage title. The are many loan providers that will make it easier for you to borrow money using your car’s title. Many lenders will also be willing to help you get funds if you have a salvage car title.

A salvage title loan is a beneficial way to finance a salvaged vehicle, particularly if you have a bad credit history. Getting a title loan on a salvage title will allow you to pay for the car in full and then repay the loan in monthly installments according to the lender’s guidelines.

How to Qualify for a Title Loan on a Salvage Title?

Approved car loan document

Requirements for loans on a salvage title vary between different lenders. That being said, in case you get turned down by one lender, you may have a chance to find another lender that will be willing to move forward with your request. 

You can qualify for a title loan if you fulfill all relevant requirements and provide complete documentation to the lender. You are likely to be asked for all records of the damage caused to your vehicle, along with the receipts of the repairs done to your car that have made it capable of returning on the road. 

Regardless of the insurance company you choose for your salvage title loan, here are some common requirements to qualify for it:

  • You should be the legal owner of the vehicle and have the car title in your name.
  • You must provide proof of your monthly income in the form of bank statements or paystubs.
  • You must provide proof of residence, such as a lease agreement or utility bill in your name. 
  • You must present your government-issued ID, like a driver’s license or state ID card.

The Bottom Line

Salvage title loans are a convenient way of getting the necessary funds to buy a vehicle with a salvage title. Still, you have to keep in mind that the loan conditions vary across the states, so it’s crucial always to check the guidelines applied to the area you reside in.

Besides, purchasing a salvage car might be a risky investment considering the fact that a salvage vehicle has been subject to severe damage. However, with a little effort and a reasonable approach, you can still put it to good use. Therefore, a salvage title loan may be an excellent option for you.

If you’re looking for a reliable and hassle-free title loan provider to help you finance a salvage car, you can get all the support you need here at TitleLo. Apply today to get the best quote on your salvage title loan. 


What is a branded title?

A branded title indicates how a salvage car was damaged and what the level of the damage is. The designations are specific and vary depending on the state. 

How much does a salvage title reduce a vehicle’s value?

A salvage title will usually lower the value of a vehicle by 20% to 40%. You should have your salvaged car appraised before you finalize the purchase. 

How much can I get with a title loan if my car is salvaged?

Your salvage title loan amount will depend on how much your salvage vehicle is worth, your ability to make repayments, and the state you reside in. 

Your car’s value is determined by its condition, make and model, age, mileage, as well as its title. This means that a salvage title can influence the value of your vehicle to some extent. 

Some people may think that vehicles with salvage titles always have a lower value than cars with regular titles. This is not always the case. If you consider any elite vehicle with a salvage title, there is a possibility that it will still be worth more than a standard car. 

The best way to determine how much title loan you can get with a salvage car title is to ask your lender, and they will work out the maximum loan amount based on your individual circumstances.