Pawning Your Vehicle vs. Car Title Loans


When you are in need of cash during a financial emergency, it is not uncommon for people to consider pawning gold, jewelry, electronics, or other such items at their local pawn shop. Another viable option people are using is to pawn their car to get the cash they need.

However, there is often confusion about what pawning a car entails, compared to obtaining a car title loan. Some online resources you might come across make it sound like these are exactly the same thing and allow you to get fast cash for vehicles.

Yet, they are not, even though both allow you to convert your vehicle into cash. Here at Massa Auto Pawn & Sales, we want you to understand the differences between the two methods so you can make informed decisions should you need to get cash out of your vehicle.

What Is a Car Pawn Shop?

A car pawn shop is much like a used car dealership in that the auto pawn dealer buys and sells used vehicles. If your car is fully paid off and you have a clear free title but no longer want the car or need cash quickly, you can bring the car into one of our car pawn shops near you and sell it to us today


Once you sell your car to us, you walk out with cash in hand the same day. There are no loan applications, credit checks, or other such aspects to obtaining your cash. We value your car based on the model year, mileage, wholesale value, and other factors to determine a fair purchase price.

If you change your mind and want your car back, then you simply pay us back the amount we paid, plus a 10% fee. For instance, if we paid you $3,000 for your car, you would pay us $3,000 plus $300 for the 10% fee, for a total of $3,300 to get your car back within 30 days, or 10% to renew for an additional 30 days.

Keep in mind, your vehicle is only held for 30 days. After this time, we can sell it to someone else looking to buy a used vehicle. However, if you do want to buy it back but need longer to pay us back the money we paid you, simply let us know within the first 30 days, pay the 10% fee, and renew your contract for another 30 days.


What Is a Car Title Loan?

A car title loan is an entirely different process from pawning your vehicle. The only real similarity is you do need a clear and free title, meaning the car must not have any existing liens against it. The amount you can borrow is also based on the value of the vehicle, using different factors, like the model year, mileage, and so on.

Obtaining a car title loan is much like going to a car dealership and financing a vehicle. Basically, you are borrowing cash against the equity in the vehicle. You retain ownership of the vehicle, and the lender places a lien on the car. In the event you are not able to pay back your loan, then the lender can take the car and sell it to satisfy the loan.

Car title loans are not allowed in the state of Colorado, requiring all pawnbrokers to retain possession of pawned vehicles.  But don't worry!  Massa Auto Pawn logs the miles on your contract so you can be assured that while at Massa, your vehicle stays safe and isn't being driven.  We are also insured against theft and vandalism!  

There are different places where you can apply for car title loans, including:

  • Banks - Based on your credit
  • Credit Unions - Based on your credit
  • Car Title Loan Brokers - Not allowed in Colorado

OR!  You could pawn your car at Massa Auto Pawn, get FAST CASH, and it is based on the value of your car, NOT your credit!  

The length of repayment periods varies from one place to another and could be for a few months or several years.

Pros/Cons of Pawning Cars

There are both advantages and disadvantages of pawning your car that you need to be aware of to make informed decisions.


  • Get fast cash for vehicles. You typically walk out with cash in hand the same day you bring your vehicle into one of our auto pawn shops and sell it to us. 
  • You do not have to worry about keeping full coverage insurance on the vehicle since you no longer own it. 
  • This is great for converting vehicles you no longer want or need into cash, without having to find your own buyers. 
  • You can change your mind and “repurchase” your car by paying back the money you were paid, plus a 10% fee, within 30 days. 


  • You no longer have access to the vehicle because you sold it.
  • Your car will be sold to someone else after 30 days.

Pros/Cons of Car Title Loans

Since car title loans are loans, there are also pros and cons of using this method to convert the equity in your car into cash.


  • You get to keep the car and still are allowed to drive it while you pay off the loan.


  • You are taking out a loan and have to maintain full coverage car insurance until it is paid off.
  • You must surrender the title and, normally, one set of keys to the lender to hold in case you default on your loan.
  • Interest rates can be higher on car title loans if you have bad/poor credit. 
  • Depending on where you apply for your loan, it can take several days to weeks before you find out if you are approved for the loan and get your cash. 
  • You can be required to maintain the vehicle in its current condition. 
  • Payments may be reported to the credit bureaus and could affect your credit rating if you pay late or default on the title loan. 
  • Some car title loan brokers require you to take out their full coverage insurance policy if you cannot provide documentation showing you have full coverage insurance already on your vehicle or if you do not pay for it through your own agent in full. 

Which Option Is Better?


Deciding which option is better largely depends on your current/future financial situation. For instance, if you were recently laid off from your job and know it is going to take some time to find another job, then selling (pawning) your vehicle would be better because you would not have to worry about car payments.

On the other hand, if you are still working but just had a financial emergency arise, then a car title loan could be the better solution, as long as you have the means to repay the car loan in the required loan period. Yet, if you needed cash immediately and know you will be able to “repurchase” your car within 30 days, pawning may be better, since we only charge a 10% fee.

What if I Need Cash Quickly and a Vehicle to Drive?

You would be surprised by how many people fall into the type of situation where they need some cash and still need a vehicle to drive to and from work. What you could do is pawn your car to us to get the cash you need.

Then you could use part of that cash to buy one of our lower-priced quality used cars for sale. For example, we buy your current car for $5,000, and you use half of that to buy a new used car from our car lot. This way, you walk out of our car pawn shop with some cash in hand and a car you can still drive.

Another option some people take advantage of is to sell us their current vehicle for cash, and then buy another vehicle using our easy financing options. Granted, this would mean a car loan, but it would allow you to get cash quickly, as well as get a used car you can afford. 

drive-in-used-auto-pawned-carAside from cars, we also buy:

  • RVs
  • ATVs
  • Golf carts
  • Jet skis
  • Boats
  • Snowmobiles
  • Construction vehicles
  • Motorcycles
  • Trailers
  • Dirt Bikes
  • Scooters

If you own any of these types of vehicles with a clear and free title, you can also sell it for fast cash today! If you still have further questions about pawning (selling) your car and are not entirely sure whether this is the right choice for you, please feel free to stop by a Massa Auto Pawn & Sales car pawn shop near you or contact us at 720.598.0081.