Can you scrap a car with a title loan?

I drive an old sedan that has been nothing but a pain to keep on the road. After the last repair estimate, the mechanic said I should scrap the car rather than pay for the repairs, and I have no problem ridding myself of this burden, but I took out a car title loan on the vehicle. Can you still scrap a car even though it has a title loan?

Answer
It’s good you recognized investing more money into your old vehicle is not a wise decision. Unfortunately, you cannot scrap a vehicle with a title loan because you do not own the vehicle outright.
To scrap the vehicle, you need to pay the remaining balance of your loan or contact the lender to find a solution that leaves you both satisfied. Occasionally, the lender may take possession of the vehicle in its current condition and consider the debt settled, but it depends if they can recoup their losses or not.
Alternatively, if you get a quote on your vehicle that is more than you owe, the lender may allow you to sell the car and then pay the remainder of your loan.
Once the debt has been settled and you are shopping for a new vehicle, don’t forget to buy car insurance. To easily compare quotes and purchase a new policy, download the Jerry app. After providing you with a comprehensive cross-analysis of the best policies across providers, Jerry will handle the phone calls, paperwork, and renewals for your top pick so that you don’t have to. The average Jerry driver saves $879 a year on car insurance!
Jack Walsh
Answered on Nov 05, 2021
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