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CA Lemon tittle - Can I even apply for autoloan?

tengtengvn
Frequent Contributor

CA Lemon tittle - Can I even apply for autoloan?

I found a sweet unicorn car but it has lemon tittle. The issue had been fixed by the mft under warranty. Is it possible to get an auto loan for it? Does anyone have experience with this?

What's in your wallet?
-Not Capital One.
Message 1 of 5
4 REPLIES 4
Loquat
Moderator

Re: CA Lemon tittle - Can I even apply for autoloan?

@tengtengvn Sure you can get an auto loan on a vehicle bought back because of lemon law. The dealer must provide you with paperwork that says what the initial problem was, how the manufacturer fixed the issue, and that all is well. But you certainly can and most banks in my experience don't have any issue with it.

Message 2 of 5
tengtengvn
Frequent Contributor

Re: CA Lemon tittle - Can I even apply for autoloan?

Thanks Loquat! It turned out at most major banks and local CUs won't touch lemon \ buyback vehicles. Westlake Financial Services is what the dealers use for this type of high risk cars but the rate might be higher at 4% for branded title cars.

What's in your wallet?
-Not Capital One.
Message 3 of 5
aj2121
Regular Contributor

Re: CA Lemon tittle - Can I even apply for autoloan?

Unfortunately, there are quite a few lenders that won't touch branded title vehicles, whether that is a lemon, salvage, flood, theft, odometer discrepancy, etc. The ones that do lend money on branded title vehicles usually don't have rates that are competitive with prime lenders. Now, the vehicle can be a manufacturer buyback (would still qualify to be a lemon) but not have a branded title. In that instance regular auto lenders will still approve the loan as they would on any other vehicle in similar condition since the title is clean.

FICO8 as of 4/9/21:
Message 4 of 5
Loquat
Moderator

Re: CA Lemon tittle - Can I even apply for autoloan?


@aj2121 wrote:

Unfortunately, there are quite a few lenders that won't touch branded title vehicles, whether that is a lemon, salvage, flood, theft, odometer discrepancy, etc. The ones that do lend money on branded title vehicles usually don't have rates that are competitive with prime lenders. Now, the vehicle can be a manufacturer buyback (would still qualify to be a lemon) but not have a branded title. In that instance regular auto lenders will still approve the loan as they would on any other vehicle in similar condition since the title is clean.


+1.  When I was spinning paper in the box I hung a many of deals with Chase Custom, Acadia, TransSouth, AutoOne, Wells Fargo, MAC, and even CapOne on manufacturer buybacks.  

 

I can't remember the exact issue Mitsubishi had with the Galant but our preowned manager picked up quite a few of them from Enterprise when they turned their fleet that were affected by manufacturer buyback and I hung those deals a many of times.  It was the perfect "program" car.  

Message 5 of 5
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