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When you’re faced with a financial emergency and need cash fast, pawning might come to mind. You may even consider pawning your car.

Pawn shops accept all sorts of items, including cars. So, it’s possible to pawn your car if you’re in a bind—but is it the best solution?

Continue reading ahead to learn all about car pawning.

What Happens When You Pawn A Car?

When you pawn a car, you’re taking out a short-term loan (about 15 to 30 days). The car is used as collateral until you pay off the loan. If you don’t pay it off within the agreed-upon timeframe, the pawnshop will repossess your car.

In most cases, the pawn shop keeps your car until you repay the loan. However, some shops will allow you to take out a loan on your car title instead. In this scenario, you can still drive your car, but your interest rate will be much higher.

Plus, if you can’t pay back your loan, you will need to turn your car into the pawn shop.

The loan you take out will usually be equivalent to the value of your car. Some pawn shops, though, will loan you a percentage of the value of your vehicle. For instance, if your car is worth $6,000, the pawnshop can give you a loan of $3,000.

should i pawn my car

How To Pawn A Car

1. Find a pawnshop.

Not all pawn shops accept vehicles. So, your first step is to find a pawn shop that will give you a loan for your car. You can do so by searching online. Some shops will also allow you to start the process of pawning online whereas others will require you to come in person for an appraisal.

2. Determine the value of your car.

The pawnshop will appraise your car to determine your loan amount. However, you should come prepared to negotiate by knowing the market value of your car.

You can utilize free resources like Kelley Blue Book as well as existing used car listings to get a ballpark estimate of your vehicle. Make sure to print out this information to be able to use it as leverage.

Note, though, that pawn shops often have a minimum value requirement. For instance, your car must be worth at least $1,500. So, if your car has extensive damage or is totaled, you might not be able to pawn it.

3. Gather your documents.

You will need to bring several documents with you to the pawn shop. They will likely include:

  • A car title.

  • A valid driver’s license.

  • Pay stubs.

  • Vehicle registration.

  • Proof of insurance.

  • References.

  • Employment information.

The pawn shop will want to be certain that you have the means to pay off the loan and prove that it is your car.


Our expert evaluators can help you get an accurate estimate for your car's value, FAST!

The Benefits Of Pawning Your Car

benefits of pawning a car

Pawning your car can be risky, but there are a few benefits:

  1. It’s a fast way to get money for a financial emergency.

  2. The loan is short-term so you won’t be spending years paying it back.

  3. In many cases, you can get your money on the same day.

  4. You usually do not need a credit check to get a loan.

The Drawbacks of Pawning Your Car

There are numerous drawbacks to pawning your car including:

  1. Pawn shop loans have high interest rates, starting at 20%.

  2. You’ll need an alternate form of transportation if your car was your primary way of getting around.

  3. Cars can depreciate quickly. This means that the loan you take out on your car could be worth less in the end.

  4. You can only get a loan that’s about the same as your car’s value. In some cases, you can only get a percentage of your car’s value.

  5. You’ll need to pay back the money.

  6. Your car might not be stored in a safe place.

  7. You will lose your car if you can’t repay the loan.

Can You Pawn A Car Without A Title?

You need a car title to pawn a car. Not just any title, the original car title. The title needs to be clear and free. If you haven’t paid off your car, and your lien holder still maintains your title, you won’t be able to pawn the car.

A copy of the title or a Bill of Sale will not suffice.

However, if your original title is damaged or missing, you may apply for a duplicate at your local DMV and that will suffice.

Can You Pawn A Car Without Insurance?

You do not need to have insurance to pawn a car. However, it is recommended that you are insured before pawning in case your car is damaged.

Is It Better To Pawn Or Sell?

If you’re in a financial emergency, need some cash fast, and are willing to part with your vehicle, you might be leaning toward getting a loan from a pawn shop. However, pawning can be risky, especially if you’re not able to pay off the loan in time.

As a result, pawning should only be considered as a last resort.

While selling seems like a more permanent option, it can be the better choice, especially if your car is old or damaged. When you sell, you have no loans to deal with, so you get to keep your money and use it for your emergency.

Don’t Pawn Your Car — Sell It To CarBrain!

why pawning your car is a bad idea

Pawning your car is risky, but selling to CarBrain is risk-free. With us, you can expect to get a great rate for even a totaled or junk car. Here’s how easy our process is:

  1. Get a fair-market quote in less than two minutes.

  2. Accept our offer and schedule your free pickup.

  3. Get paid in as little as 24 hours for your car!

You can sell your automobile and have the money you need in 24 to 48 hours when you work with CarBrain.

There are no loans to pay back, you won’t need to stress over how you’re going to repay your loan, and you don’t even need to have your car paid off.

Try CarBrain today!

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Frequently Asked Questions

Can You Pawn A Financed Car?

Usually, you cannot pawn a car that hasn’t been fully paid off. If you’ve been making regular payments on your car though and your lien holder can vouch for you, then the pawnshop owner may allow it.

When Is It a Good Idea to Pawn Your Car?

It is never really a good idea to pawn your car as it’s a high-risk option. This is especially true if you’re experiencing a financial emergency wherein you can’t confidently pay back a short-term loan.

Pawning your car should be an absolute last resort.

Do I Need a Good Credit Score to Pawn My Car?

Pawn shops usually don’t ask for a credit check. It usually doesn’t matter if you have good or bad credit as long as you provide proof of income and verify that you have the means to pay back the loan.

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