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How do I get an auto loan for a salvage car?
I found an awesome salvage car that my dad's friend rebuilt. He wants $7,000 for it, but I only have $5,000 saved up. Can I get a loan for a salvage car?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
If tuned up and rebuilt through the right mechanic or restorer, salvage cars may be a bargain! The unfortunate news is that a vast majority of lenders won’t do a
car loan
on a car with a salvage title.Lenders don’t want to have a loan on a car that could potentially be worthless or doesn’t meet reliability or safety standards. However, you might be able to get a loan on a
rebuilt title
.If your friend did superb work on the car, you can schedule an inspection with the state. If the car passes this safety inspection, your friend can retitle it as a rebuilt vehicle.
Lenders are far more willing to give you a car loan on a rebuilt title than a salvage title. But don’t be shocked if the interest rate is a bit higher than new cars or even other used cars. Alternatively, you could take out a personal loan, or signature loan, to purchase the car. This will have an even higher interest rate, but since it’s only for $2,000, you can pay it off early.
If you secure a car loan for the rebuilt vehicle, you should also think about car insurance. Some car insurance companies will offer
liability coverage
for this vehicle, but getting other types of coverage may not always be possible.Use the
Jerry
app to compare liability insurance rates and other types of possible coverage for your car in just minutes.View full answer
- Gregory R.
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