Posted on 06/08/2015 5:50:27 PM PDT by dynachrome
Cash-strapped consumers are being shown a new place to find money: their driveways.
Short-term lenders, seeking a detour around newly toughened restrictions on payday and other small loans, are pushing Americans to borrow more money than they often need by using their debt-free autos as collateral.
So-called auto title loans — the motor vehicle version of a home equity loan — are growing rapidly in California and 24 other states where lax regulations have allowed them to flourish in recent years.
Their hefty principal and high interest rates are creating another avenue that traps unwary consumers in a cycle of debt. For about 1 out of 9 borrowers, the loan ends with their vehicles being repossessed.
(Excerpt) Read more at latimes.com ...
You can drive through the west side of Phoenix and see one of these title loan places about every 300 feet. Hard to imagine there is that much money in used car titles, but I used to know a guy who owns one of the companies - he lives in a 2 million dollar house in North Scottsdale. :)
Don’t pawn your car....it’s a pretty simple concept.
Idiots should not be protected from their idiocy. If someone does not realize what the deal is with payday loans or title loans it should hurt them. But nope. Democrats need an ever expanding base of victims.
Who the hell still drives a 1978 Ford or Chevy anything? The only reason I can still putter around in a 1984 Mercedes is because they’re built like a tank. I don’t remember the last time I saw a Pinto, Vega, Dart or Pacer from way back then. Do you?
I'm reading this as the rest in default aren't worth hauling to the auction.
It’s not their fault - the contracts were written in cursive.
“predatory lending”,???
Usury:
Charging Interest on something that is not yours, which has been replaced with charging excessive interest.
Since 8-15-1971 ALL LENDING is PREDATORY!!!
25% monthly. That equals up to 300% in a year. They only do monthly loans. So if you can’t make a full payment by the end of the month, they will have you sign on for another month with the remaining amount added on top of the original amount. Once again adding 25% interest on top of it. A thousand dollar($1,000) loan will cost you. $250.00 by the end of the month. So basically if you can’t come up with $1250.00 by the end of the month they will roll it over, and start over. After 4 months your interest amount is more then your original loan. After that point. They are in a win/win situation. They can repossess your car, and sell it, or string you on indefinitely with nothing but interest payments.
If you're a "cash-strapped consumer" the answer is easy CONSUME LESS!!
Ignorance is curable. Stupid is forever
I’m not one for big government, but the majority of humans simply have a weakness, going back to biblical times, that will take the money first, and worry about paying it back later.
Sorry, but these predators need to be regulated and maybe shut down. Maybe some good comes to 5% of the people that take these loans to get through a bad time...but I doubt it’s even that high. We saw the damage they did to people during the housing bubble, when they issued exploding loans.
About 10 yrs. ago, I sold a pick up to my s-I-l and her husband for $7,000. They couldn't get a bank loan because of poor credit. She tried to get me to "take pymts" on it. I refused for the same reason the bank did but to keep the peace, I told her that we really needed the cash.
I've known her and her husband for more than 50 years, I knew, without a doubt, that they would never repay me in a hundred years.
They really wanted that truck and I was selling it to them at a real bargain price. They finally found a loan company to loan them the money at 27% for 7 years.
I didn't do the math but they probably paid double for the truck.
MORE than double, actually. $15,643 on 84 payments of 186.23 (assuming they made the payments on time and didn’t get hit with usurious fees).
Usury is a biblical evil and used to be banned in the US and most countries. Yes people are idiots but thats the point, and it is their fault but I also feel for them. You pass laws like Usury to protect people from themselves otherwise the wolves will have you. Until then you can find great deals on cars here in the Valley.
27%?! That’s more than the interest rate my CC charges on ATM withdrawals!
(Std rate is 19.8%—not bad for a first credit card, considering that the “prescreened credit offers” that show up in my mailbox are for loans with rates upwards of 25%.)
stupid......there’s NO CURE
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.