Ever browsed through Auto Trader and saw a salvaged title car in the perfect colour at a very low price? You’re not alone if you have. You’ll often find salvage title vehicles on online marketplaces as it’s a common place to sell them. Recently, we had a customer try and finance a loan for a salvaged car.
Can you use a loan for a salvaged car in Grimsby? Can you drive a salvaged car in Ontario? How can you make it road legal again?
Can you Use a Loan for a Salvaged Car?
Let’s get the main question out the way first. Can you buy a salvaged car with an auto loan? The short answer is no. Most lenders will not lend against a car that has a salvage title.
Even if you have the knowledge and facilities to fully repair it and have it inspected, a lender will be very reticent to lend against such a car.
Auto loans are secured against the car. Lenders know that if you default on the loan, they can repossess the car and get most of their money back. There are no such guarantees with a salvaged car.
You could use a personal loan and some used car loans may work but you’ll usually need to be a cash buyer to buy salvaged cars.
Are salvage title cars legal to drive in Ontario?
In a word, no. You can only drive a car once the car has been inspected and the salvage title cleared by using the Interprovincial Record Exchange (IRE) network.
Only once the car has been inspected and signed off by a Type 6 Motor Vehicle Inspection Station (MVIS), can the title be changed. Check the CCMTA website for more details.
That means if you buy a salvaged car, you’ll need to tow or truck it home. You will not be able to legally drive it.
When rebuilding the car, you need to keep detailed records about what you did, what parts you used, the source of the parts, insurer details for the original salvage, colour photographs showing the restoration and a notarized copy of a declaration guaranteeing all work.
If you have a garage do the work, they will need to do exactly the same but will probably know how to do it and have processes to handle it. Make sure to check first though as it’s down to you at the end of the day!
Once repaired, the car needs to pass a structural integrity inspection. Once done, you can take all your paperwork to your local licensing office to have the title changed.
To be honest, even though salvaged title cars are usually cheap, they come with their own costs. Whether that’s time and labour in repairing or the paperwork involved in having the title changed.
With so many quality used cars around right now, it’s only worth taking on a salvaged title if you own a garage or want a weekend hobby. Otherwise, it’s really not worth the hassle!
For those of you who know that you have a challenging credit situation, please visit Dixie Auto Loans where we have a team of credit specialists ready to help you get approved for a car loan today!
For any questions or concerns, please don’t hesitate to contact us here!