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What happens if my car is totaled and I have a title loan?

Getting a Title Loan on a Salvage Title

Updated on February 3, 2023


A car title loan is no longer a new term in the world of finance. It’s a type of secured loan which allows you to use the clear title of your vehicle as collateral to borrow money. But what if your car has a salvage title?

If you own a car with a salvage title or are tempted to buy a vehicle with a salvage title, you would definitely want to know if you can still get a title loan. The answer is probably “yes”.

The dictionary meaning of the term salvage could make you ponder whether having a salvage title is good or bad. So here we are to help you have a better understanding and knowledge of a car title loan with a salvage title.

What is a Salvage Title?

If you read “Salvage” marked on a car title it means that the car has been totaled, or otherwise has suffered damage to the extent that the insurance company considers it to be uneconomical to repair.

The leading causes of salvage title are damage due to a massive crash, fire, theft, flood or any other natural disaster. Generally, an insurance company assesses the damage and declares a car totaled. It is then that the vehicle gets a salvage title.

In some cases, a vehicle that has been rebuilt using parts of other cars is also called a salvage car and its title becomes a salvage title.

It is also important to know that the actual designation of a salvage car varies from state to state, so it’s always better to check your state's laws on salvage title vehicles for more details.

Difference Between Salvage and Rebuilt Titles

Often people get confused between the terms salvage and rebuilt title when searching for a used car. The definition and guidelines of a salvage title and rebuilt title depends on the state in which you live.

However, in general, a rebuilt title is issued to a car that was previously a salvage vehicle but has now been repaired and restored to be back on the road again.

Salvage Title

Rebuilt Title

Condition of the Vehicle Damaged or totaledReinstated
Permission to DriveCannot be drivenDriven only after an inspection

Should You Buy A Car With A Salvage Title?

You can easily spot a salvage title car with its suspiciously low price and that’s what makes it a tempting proposition to buy. But would it be wise to buy a car having a salvage title? There are a lot of factors to consider when you buy a salvage title vehicle. One of the most crucial factors that can decide your buying decision are the laws pertaining to salvage vehicles in your state.

Certain states don’t legally allow a car with salvage title on the roads. On the other hand, there are some states that permit a rebuilt car to be driven on the open road again after a thorough vehicle inspection. Hence, it’s always better to check your state’s DMV guidelines before you purchase a vehicle with a salvage title.

Can You Get a Title Loan on a Salvage Title?

Yes, you can get a title loan if you have a vehicle with a salvage title in some cases. There are many lenders who make it easier for you to get funds using your car title. Some of these lenders also don’t mind providing you a title loan using your salvage car title.

A salvage title loan can be a convenient way to get cash for those who have a bad credit history. The fact that a salvage car is affordable and you might have bought it by paying in full, you can always consider getting a title loan on a salvage title and find it easier to repay the loan in equal monthly installments now.

How to Qualify for a Title Loan if Your Car is Salvage?

Different lenders have different loan requirements for loans on a salvage title. This means if one lender turns you down, there can be another lender who may be willing to work with you. At CASH 1, the requirements for getting a salvaged title loan are more or less the same as getting a regular car title loan.

You can easily qualify for a loan if you fulfill all the requirements and present all the necessary documents to your lender. Many salvage title loan lenders ask for complete documentation of the damage caused to your car along with the receipts of the repairs done to make the vehicle roadworthy. Apart from that, here are the common requirements to qualify for a loan on a salvage title:

  • You should be the owner of the car and have the car title in your name.
  • You must have proof of your monthly income like a paystub or bank statement.
  • You should have a government-issued ID like Driver's License or State ID card.
  • You must have proof of residence like a copy of a utility bill or lease agreement.

How Much Could You Get with a Title Loan if Your Car is Salvage?

Just like a title loan, your loan amount for a salvage title loan depends on the value of the vehicle, your ability to repay and the state you reside in. The value of your vehicle is determined by various factors like the vehicle’s condition, make and model, mileage, age, and also its title type. This implies that a salvage title can impact the value of your car to some extent.

While you may think that vehicles with a salvage title might always have a lower value than a car with a clear title, that’s actually a wrong perception. If you consider any premium elite vehicle with a salvage title, it could be possible that its worth could be still greater than that of a regular vehicle.

You can ask your lender to help you determine the value of your vehicle and the maximum amounts of money that you can borrow from a title loan.

Where can you get a Salvage Title Loan?

As we mentioned earlier, salvage title loans work differently in every state. While some states don’t allow lending title loans at all, there are states with fewer restrictions. Depending on where you live, the criteria to get a title loan on salvage title can vary. Thus, it’s important to do your research and find a lender who is willing to finance a salvage title vehicle in your state.

We at CASH 1 offer title loans on restored salvage titles in Arizona. If you are looking for an easy and inexpensive way to borrow funds then you should know that salvage title loans can be a wonderful option.

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Harita Solanki

Harita Solanki is a passionate advocate for personal finance and believes in empowering individuals to take control of their financial lives.

Her expertise covers a wide range of personal finance topics, including budgeting, saving, credit, debt management, and retirement planning.

With over six years of dedicated experience in the finance industry, Harita has helped countless readers of CASH 1 Loans make informed decisions and achieve their financial goals.

As a dedicated writer, Harita has contributed to numerous financial publications, sharing her knowledge and insights to help readers navigate the complexities of personal finance.

Her writing style is approachable, concise, and tailored to the needs of everyday individuals looking to improve their financial well-being.