Banks That Finance Rebuilt & Salvage Titles

If you’re car shopping and have stumbled across a Salvage/Rebuilt title car, you’ve probably noticed that the pricing is incredible. But if you’re like most people, you still need financing, which can be much more difficult for cars with a rebuilt title.

So, what banks or credit unions finance rebuilt title cars?

List of Banks and Credit Unions That Finance Rebuilt Titles

Below, I have researched and compiled a list of banks and credit unions that finance rebuilt titles.

Lender	Details
Banks
Springleaf Financial	May finance up to 50% of salvage title car’s value
Credit Unions
PenFed Credit Union	Offers financing for salvage and rebuilt titles with approved credit
Bethpage Federal Credit Union	Considers salvage title financing on a case-by-case basis
Truliant Federal Credit Union	North Carolina credit union that finances some salvage titles
Affinity Plus Federal Credit Union	Small credit union that may approve salvage title financing
Polish American Credit Union	Reportedly finances salvage titles with substantial down payments
Specialty Lenders
Westlake Financial	Advertises auto loans specifically for rebuilt title vehicles
LightStream	May finance rebuilt titles for borrowers with good to excellent credit
RoadLoans.com	Online lender focused on high-risk auto loans like salvage titles

Potentially Helpful Articles:

• Banks That Finance Cars Older Than 10 Years
• Banks That Finance Private Party Auto Loans
• How To Turn a Rebuilt Title to a Clean Title
• Rebuilt Title Insurance Cost

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What Is a Salvage Rebuilt Title

A salvage title means the car was deemed a total loss by an insurance company after sustaining major damage. This is usually due to a major accident, flood damage, or other event where repairs exceed the vehicle’s value.

Any car title that has been branded as salvage must be disclosed to any future buyers by law.

Now, once a vehicle with a salvage title has been properly repaired and passes a state mandated inspection, it can receive a Rebuilt Title (AKA Salvage/Rebuilt Title indicating it was salvage and has been rebuilt).

Once a vehicle has the rebuilt title status it can now legally be registered and driven on public roadways.

A branded title is simply and broad term given to any title that isn’t clean such as salvage, rebuilt, flood damage, etc..

Why is financing a Rebuilt or Salvage Title More Difficult?

Banks avoid financing salvage title cars because

• They are viewed as high-risk investments due to uncertainty around repairs.
• The car will be difficult to resell if repossessed.
• Many insurers won’t offer full coverage.
• Interest rates must be set higher to offset the risk.

Important: Financing a rebuilt title car will also require a higher cash down payment, potentially 20-30% or more of the cars total value.

So, while banks and credit unions will finance a car with a branded title, expect to pay more upfront on your down payment and more on the back end in the form of higher interest rates.

Lenders That May Finance Salvage Title Vehicles

Very few mainstream banks will finance a salvage title car. However, some options exist among credit unions, online lenders, and specialty financing companies:

Banks

• Springleaf Financial – Personal loan lender that may finance up to 50% of a salvage title car’s value.

Credit Unions

• PenFed Credit Union – Offers auto financing for salvage and rebuilt titles on approved credit.
• Bethpage Federal Credit Union – May finance salvage titles on a case-by-case basis.
• Truliant Federal Credit Union – Credit union based in North Carolina that finances some salvage titles.
• Affinity Plus Federal Credit Union – Small credit union that may approve salvage title financing.
• Polish American Credit Union – Reportedly finances salvage titles with substantial down payments.

Specialty Lenders

• Westlake Financial – Advertises auto loans for rebuilt title vehicles.
• RoadLoans.com – An online lender focused on financing high-risk auto loans.

This list isn’t exhaustive but gives an idea of some potential options. I’d recommend calling lenders directly to ask about current salvage title lending policies.

Pros and Cons of Buying a Car with a Rebuilt Title

Pros:

1. Lower Cost: Cars with rebuilt titles typically sell for 20-40% less than their counterparts with clean titles, making them an attractive option for budget-conscious buyers.
2. Extensive History: Rebuilt titles often come with detailed documentation of the repairs and inspections performed, providing transparency about the vehicle’s condition.
3. Potential for a Good Deal: If the damage was minor and the repairs were done correctly, a rebuilt title car could be a bargain for someone willing to take the risk.

Cons:

1. Difficulty Obtaining Insurance: Many insurance companies are hesitant to provide full coverage for vehicles with rebuilt titles due to the potential for hidden damage or improper repairs.
2. Financing Challenges: Major banks like Wells Fargo, Chase, Capital One, and Bank of America generally do not finance rebuilt title vehicles due to the associated risks. Buyers may need to seek alternative financing options or pay cash.
3. Resale Value: Rebuilt title cars typically have lower resale values compared to vehicles with clean titles, making them less desirable for future trade-ins or private sales.
4. Hidden Damage: Despite inspections, there is always a risk of undiscovered or improperly repaired damage that could lead to future mechanical issues or safety concerns.
5. Difficulty Registering: Some states have strict regulations regarding the registration and titling of rebuilt vehicles, potentially adding additional hurdles and costs.

Tips to Improve Your Chances of Approval

Getting approved for salvage title financing requires going the extra mile compared to a traditional auto loan. Here are some tips:

• Have extensive repair documentation – Showing evidence the car was properly rebuilt will reassure lenders.
• Make a large down payment – A 30-50% down payment can lower a lender’s risk.
• Get quotes from multiple lenders – Compare interest rates and terms to find the best deal. Online lenders may offer more flexibility.
• Improve your credit – A score over 700 will improve your odds of approval substantially.
• Add comprehensive insurance – Full coverage is required by most salvage title lenders. Shop for affordable policies.
• Highlight additional collateral – Real estate or cash reserves could help offset the risk of the car loan.

With preparation and an understanding of lender requirements, it’s possible for your financing application for a salvage title car to get the green light.

The Process of Buying a Salvage Title Car

If you decide to pursue financing a salvage title vehicle, you’ll need to take additional steps during the buying process:

Inspection and Background Checks Are Critical

• Have a trusted mechanic perform a thorough inspection to identify any issues or signs of shoddy repair work.
• Run a vehicle history report using the VIN and check databases like the National Motor Vehicle Title Information System (NMVTIS) for title brand records.
• Request repair receipts, photos, and details on the damage from the seller.

Shop Multiple Lenders for the Best Loan Terms

• Get pre-qualified with multiple banks, credit unions, and online auto lenders. Compare interest rates and down payment requirements.
• Look for lenders familiar with salvage title lending or subprime auto loans to rebuild credit. Avoid predatory lenders charging exorbitant rates or fees.
• Read all fine print! Salvage title loan agreements often have unique stipulations around insurance, liability for undisclosed defects, etc.

Finalize the Purchase Carefully

• Review title documents to ensure the salvage brand is properly recorded. This is required to be disclosed by law.
• Make sure the lender records their lien on the title during the financing process.
• Comply with your state’s title transfer process and registration requirements for salvage vehicles when buying.

Does Navy Federal Finance Salvage Titles

Navy Federal Credit Union does not appear to offer financing for salvage title vehicles based on their current auto loan policies.

Some key points:

• Navy Federal previously financed salvage titles but stopped in 2022 according to member forum posts.
• Their auto loan instructions warn against purchasing salvage title cars.
• Their FAQ states salvaged cars cannot be financed with a Navy Federal auto loan.
• They are not included on lists of credit unions willing to finance rebuilt titles.
• Personal finance experts advise traditional banks avoid these loans due to the risks.

While they may have offered these loans in the past, Navy Federal seems to no longer finance salvage title cars based on member reports. Those interested will likely need to look into alternative lending sources and options. But check with Navy Federal directly for their latest policy to confirm.

My Closing Thoughts

In summary, getting financing approved for a salvage or rebuilt title car takes a little more effort but can expand options for those in need of an affordable vehicle or someone who wants a vehicle that typically would be out of their price range.

Just be sure to approach the buying process carefully and research lenders thoroughly before committing to a bad deal or high interest rates.

Sources and Citations

• https://www.evolutionm.net/forums/evo-general/611404-banks-give-loans-salvaged-titles.html
• https://www.navyfederal.org/makingcents/auto/car-title-loans.html
• https://championcashloans.com/get-a-salvage-title-loan/
• https://www.onemainfinancial.com/legal/lending-process
• https://www.cash1loans.com/blog-news/what-happens-to-a-title-loan-if-a-car-is-totaled.aspx
• https://campinghiking.net/loans/rebuilt-title-car-loan/
• https://www.loancheetah.com/rebuilt-title-loans/
• https://www.allmantitleloans.com/resources/rebuilt-car-title-loan.php
• https://www.cash1loans.com/blog-news/what-happens-to-a-title-loan-if-a-car-is-totaled