Can you junk a car with a title loan?

Is there any way I can junk a car that I used to get a title loan? I hit it with my tractor the other day, and it just fell apart. It was already pretty old, and I'd like to scrap it if I can.

Answer
Unfortunately, you can’t junk a car with a title loan until you’ve paid it off in full. This is because the lender has a lien on the car, so it must be available for collateral if you can’t make your payments.
Since you can’t throw it out, check your insurance policy to see if you’re covered for damages. Coverage like collision or even comprehensive may keep you covered for tractor-related damages. Hopefully, you can find an affordable way to get your car fixed up—at least until you can pay off your loan!
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Liz Jenson
Answered on Nov 08, 2021
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