A friend of mine wants to finance a car that has a salvage title? Any banks that will do this? Without outrageous APR of course. His credit is good. Thank you
Financing a car with a salvage title?
Started by
colorado_guy
, Feb 16 2012 09:27 PM
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70 replies to this topic
#1
Posted 16 February 2012 - 09:27 PM
#2
hoapres
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Posted 16 February 2012 - 11:30 PM
Likely to be difficult. Most lenders won't touch a car with a salvaged title.
#3
Posted 16 February 2012 - 11:35 PM
How much is the car? He might be better off with a personal loan.
#4
Posted 17 February 2012 - 03:00 AM
I know ther are banks out there who extend loans on cars with salvage titles. If you know any good ones please let me know. Thank you
#5
Posted 17 February 2012 - 10:38 AM
Finding financing will be much easier than insuring it. Most insurance companies will NOT insure a salvage titled vehicle and specifically exclude coverage for such.
#6
Posted 17 February 2012 - 02:18 PM
If it is much easier to find a bank that will finance than to insure, please advise on the bank 
. He figured out insurance with Geico already
. He figured out insurance with Geico already
#7
Posted 17 February 2012 - 04:29 PM
Liability coverage, yes.
If you get a loan for a car you will be required to have 'full coverage', or comp and collision. Insurance companies will not provide 'physical damage' coverage on salvage titles. Reason? They pay replacement cost on damages. A vehicle that was bought for pennies on the dollar getting replacement cost coverage would be considered insurance fraud if the salvage is not disclosed. Typically the new 'vin' number shows some indication of a salvaged title.
Don't look for a loan because it can't be insured with a lien holder that requires physical damage coverag. Your buddy better double check his quote.
If you get a loan for a car you will be required to have 'full coverage', or comp and collision. Insurance companies will not provide 'physical damage' coverage on salvage titles. Reason? They pay replacement cost on damages. A vehicle that was bought for pennies on the dollar getting replacement cost coverage would be considered insurance fraud if the salvage is not disclosed. Typically the new 'vin' number shows some indication of a salvaged title.
Don't look for a loan because it can't be insured with a lien holder that requires physical damage coverag. Your buddy better double check his quote.
#8
Posted 17 February 2012 - 05:26 PM
Geico does full coverage for this car, he did check. This is not the point though. Does anyone know any bank/cu that will finance? Thank you
#9
MarvBear
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Posted 17 February 2012 - 06:59 PM
In all my years in the business, I do not know of any lender who would finance a vehicle with a salvage/branded title.
#10
Posted 17 February 2012 - 08:11 PM
Such cars are considered worthless as far as physical condition is concerned. A lender would have to approve it as an unsecured loan. Unsecured loans are where you borrow money for any purpose without collateral.
#11
Posted 17 February 2012 - 08:38 PM
I know there are banks that finance salvage title cars with AUTO loans, not unsecured loans. If anyone knows any particular ones please let me know the details
#12
Posted 18 February 2012 - 09:41 PM
What banks do you know will finance them? 
#13
Posted 19 February 2012 - 08:29 AM
If it has a salvage title, you need to buy it cheap enough that no loan is required. If you need a loan you might be paying too much.
#14
Posted 19 February 2012 - 04:08 PM
Tanks everyone for replies. Again, the question is: do you know any banks that will finance a car with a salvage title? If you do, please share, this is all I'm asking for. Thank you
Edited by colorado_guy, 19 February 2012 - 04:08 PM.
#15
Posted 19 February 2012 - 04:33 PM
Maybe a local CU will give him a chance since he has good credit, especially if he has an established relationship with one. Maybe... it's where I'd start anyway.
Who has he called so far?
Who has he called so far?
#16
Posted 19 February 2012 - 10:09 PM
Then the answer is "no" - I'm not aware of any banks that finance salvage cars. None. Nada. I even tried searching online and came across none, or at least none that admitted it. I also came across many sites that reaffirm that banks do not finance them.
#17
Posted 20 February 2012 - 12:26 AM
Then the answer is "no" - I'm not aware of any banks that finance salvage cars. None. Nada. I even tried searching online and came across none, or at least none that admitted it. I also came across many sites that reaffirm that banks do not finance them.
Thank you for your research
#18
Posted 20 February 2012 - 12:29 AM
Then the answer is "no" - I'm not aware of any banks that finance salvage cars. None. Nada. I even tried searching online and came across none, or at least none that admitted it. I also came across many sites that reaffirm that banks do not finance them.
Tried a local CU. They told us no matter how good the credit might be it is against their policy and they cannot finance a car with salvage title (it is rebuilt from salvage already BTW)
So far called PenFed, USAA, Navy and Alliant. Have not tried any big banks, just USAA and CUs...
#19
Posted 20 February 2012 - 11:13 AM
Yeah I think it's just hard because they can't really value it and they will have a hard time getting rid of it should the borrower default. Plus usually with salvage vehicles you aren't talking a lot of money, at least not that would exceed the limits of a personal loan. Like mentioned above, most salvage buyers pay cash. Maybe a local mom-and-pop bank? Good luck on your search.
Edited by road2freedom, 20 February 2012 - 11:14 AM.
#20
Posted 20 February 2012 - 01:13 PM
Have you tried going the unsecured route? Or a secured loan through a CU with some other collateral?
#21
Posted 20 February 2012 - 02:35 PM
This policy of not writing loans on salvaged vehicles and not offering full coverage is particularly unfair to the vehicles that were stolen and recovered after payout.
Banks and insurance companies are businesses that don't make money on niche transactions and exceptions to the rule. The reality is that most salvaged vehicles WERE in a collision at one point and whoever put them back on the road PROBABLY didn't do as good of a job that an insurance paid body shop would have done.
If the car is really old, you might be able to get classic car insurance. I wouldn't trust Geico to provide full coverage on a salvaged vehicle unless they disclosed what the total loss payout would be in advance. I could just see them pulling 3 comps and paying you $500 for your salvage vehicle that you paid $6,000 for.
Banks and insurance companies are businesses that don't make money on niche transactions and exceptions to the rule. The reality is that most salvaged vehicles WERE in a collision at one point and whoever put them back on the road PROBABLY didn't do as good of a job that an insurance paid body shop would have done.
If the car is really old, you might be able to get classic car insurance. I wouldn't trust Geico to provide full coverage on a salvaged vehicle unless they disclosed what the total loss payout would be in advance. I could just see them pulling 3 comps and paying you $500 for your salvage vehicle that you paid $6,000 for.
#22
Posted 20 February 2012 - 05:17 PM
He is buying the vehicle for 16k. 2008 Lexus IS 250. It has been professionally repaired and is currently under rebuilt from salvage title
#23
Posted 20 February 2012 - 07:22 PM
Edmunds suggests you could buy a clean one for about that, certainly for less than $20k. It's NOT worth it.
Edited by mk_378, 20 February 2012 - 07:26 PM.
#24
MarvBear
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Posted 20 February 2012 - 07:45 PM
I'm just curious, how many miles has this vehicle?
Or
is it a TMU vehicle?
Or
is it a TMU vehicle?
#25
Posted 20 February 2012 - 08:46 PM
If you spend $20,000 on a used IS250 and finance it through PenFed for 48mo, your payments will be $433
If you spend $16,000 on a salvage IS250 and finance it at 13%, you'll have a payment of $429
I know you can get a personal loan at less than 13%. You could actually put the car on a credit card with a 0% introductory rate [the dealer would be less likely to give you a good deal if they have to pay the transaction fee, but they should be happy to unload a salvage car that they can't offer financing on]
If you get a good credit card [like an SF Fire CU Visa] they will advance you cash at 7.25% apr and there is no cash advance fee. This is basically a personal line of credit at 7.25%. You're still well under the 13% threshold.
I would suggest negotiating a little more on the price of that car, though. If it was professionally rebuilt, I would only offer 50% of Blue Book.
If the car had a clean title, I would offer 80% of Blue Book.
This car is going to be hard to sell. Don't let your desire for it cloud the facts. This is an incredibly hard car for them to sell and it's going to be incredibly hard to resell. You're going to need to hold onto it until the value is below $8,000. Not many people buy used cars with more than $8,000 cash.
If you spend $16,000 on a salvage IS250 and finance it at 13%, you'll have a payment of $429
I know you can get a personal loan at less than 13%. You could actually put the car on a credit card with a 0% introductory rate [the dealer would be less likely to give you a good deal if they have to pay the transaction fee, but they should be happy to unload a salvage car that they can't offer financing on]
If you get a good credit card [like an SF Fire CU Visa] they will advance you cash at 7.25% apr and there is no cash advance fee. This is basically a personal line of credit at 7.25%. You're still well under the 13% threshold.
I would suggest negotiating a little more on the price of that car, though. If it was professionally rebuilt, I would only offer 50% of Blue Book.
If the car had a clean title, I would offer 80% of Blue Book.
This car is going to be hard to sell. Don't let your desire for it cloud the facts. This is an incredibly hard car for them to sell and it's going to be incredibly hard to resell. You're going to need to hold onto it until the value is below $8,000. Not many people buy used cars with more than $8,000 cash.
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