We had federal usury limits on credit cards and such throughout the 60s and 70s, and the economy prospered.
While I appreciate the need of the credit-challenged for money on occasion, charging these desperate people as much as 200% annual interest on car title and other loans does not help in the long run, but bleeds them for extended periods of time. Some never climb out of that credit trap.
With hard security like automobiles, charging such astronomical rates is unconscionable. I do not ordinarily support federal intervention in the marketplace, but this abuse of the poor is obscene and needs to be addressed.
Your example is a bad one.
Many years ago, I knew a young couple where the husband was only loosely connected to the labor market (that's PC speak for "had a hard time holding down a job"). They bought a used car on time, but instead of making payments they just drove it off into another state and ended up only making 2 payments out of 48.
A car may be a "hard" asset, but it is a mobile hard asset and getting it back to secure the loan can be a real challenge.
I lost track of them and don't know how they are doing now, but I suspect the only reasonable answer is "poorly".
If someone has options in how to borrow money, they will shop around until they find an acceptable rate. But there is a place in the financial world for payday lenders who charge seemingly outrageous interest -- frequently the default rates demand that.