How do you get financing on your branded or rebuilt title?
How do you get financing on your branded or rebuilt title?
OK, the first question to address is what is the difference between a branded, salvage and rebuilt, or reconstructed title? A ‘branded’ title is any title that is not a ‘clean’ title. Both salvage and rebuilt/reconstructed titles are branded, but there is a difference between salvage and rebuilt.
Can you get a loan on a vehicle with a salvage/rebuilt/branded title?
Yes, if the vehicle has been rebuilt, and it now has a rebuilt or reconstructed title. If you’re searching for branded title vehicle financing, you should know a few things about the technicalities of a branded title before you proceed. A branded title vehicle is a vehicle that has been in an insurance incident, and the insurance company has declared it a total loss. If the cost to repair the vehicle approaches or exceeds 60 - 80 % (depending on your State) of the current fair market or actual cash value of the vehicle, the insurance company will “total” it.
While most of these cars end up in the junkyard, some have been unfairly marked due to technicalities relevant only to the internal practice of the insurance agency. When a vehicle’s title is initially branded, it’s called a “salvage title” and vehicles still in their salvage state aren’t legally drivable on the streets — this true whether you live in Miami, FL, Seattle, WA, or anywhere else in the country. You’d be severely challenged to find a lender willing to provide you a loan for a car that isn’t street-legal or insurable. Let’s say impossible!
A “reconstructed” or “rebuilt” title is a previous salvage title vehicle that’s been repaired and passed a state safety inspection. It is not, however, a guarantee that the car will be problem-free.
Here are some of the issues you may find with a rebuilt title car.
Safety concerns. A vehicle needs to be both safe and functional. Cars that have suffered major damage may have or develop safety problems. In flood totaled vehicles, for instance, electrical issues may not manifest themselves until many months or years after the flood.
No warranty. Salvage title cars are no longer covered by the manufacturer’s warranty and very few extended warranty companies offer comprehensive warranty coverage at an affordable or any price. Any repairs you may need to do will be out of pocket.
Repairs needed now and later. The vehicle may need expensive repairs to start and resume functioning. Other types of damage may cause systemic problems in the future. For example, chassis damage can cause suspension, tire, and steering issues.
Financing may be more expensive. Few lenders issue an auto loan for a rebuilt title car. In a traditional auto loan, the lender uses the car as collateral — meaning they can repossess and sell the car if you don’t make payments. Because a salvage title vehicle isn’t worth much and is difficult to sell, it’s riskier for the lender. For this reason, the fair market value of a rebuilt title vehicle may be up to 40% less than an identical vehicle with a clean title. The best way to finance a vehicle with a rebuilt title is via a personal loan: An unsecured personal loan doesn’t use the car as collateral and is normally more expensive, with a higher APR. Most lenders issuing loans for older vehicles or those with a rebuilt title will require an independent fair market value appraisal by a certified auto appraiser.
Car insurance may be hard to find. You may not be able to find insurance coverage at all for a salvage car, or it may be expensive! Some insurers may be willing to offer the state-required minimum liability insurance for a reconstructed title vehicle.
Low resale value. When you’re done using a salvage title vehicle, not only will it still have the black mark of being a “rebuilt title,” it will be older with more miles on it. Even if you repair it and pass a safety inspection, the vehicle will never be worth the same amount as with a clear title.
Need an appraisal for financing? Call/text 786-853-0711
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Buying an older car has its advantages, and the purchase process is relatively easy. As simple as it is, however, it's not unusual for drivers to have questions, especially when it comes to financing. In fact, one of the most common inquiries drivers have about buying a pre-owned vehicle is, "can you finance a car older than 10 years?"
As a follow-up to this post: https://southfloridacarappraisers.com/classic-car-news-and-tips/how-do-you-get-financing-on-your-branded-or-rebuilt-title-1657747143488.html? several have asked what effect a rebuilt title has on the value of a vehicle. As attorneys are known to respond – “it depends!” Comparing two identical vehicles, same year, make, model, options, mileage, and condition, the one with the rebuilt title can be worth anywhere from 20% to 40% less than the one with a clean, no accident history.
OK, the first question to address is what is the difference between a branded, salvage and rebuilt, or reconstructed title? A ‘branded’ title is any title that is not a ‘clean’ title. Both salvage and rebuilt/reconstructed titles are branded, but there is a difference between salvage and rebuilt. Can you get a loan on a vehicle with a salvage/rebuilt/branded title?
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