Would getting rid of Title Pawns help Huntsville? (2014, loan)

[MisterEd51]

Originally Posted by RemoWilliams84

The reason you can sometimes buy items for a decent bargain in a pawnshop is because someone has already paid much of the cost of the item in pawn repayments.

The same is probably true for places that sell used cars. I know several people that have defaulted on car loans they got from a well known used car place on Sparkman Drive. This place didn't even go after them for the balance of the loans as long as they gave the cars back. I guess between the down payments and a few payments they made they got enough to cover the real value of the cars. As a bonus they got to sell the same cars again.

I forgot to mention that this place probably got these cars for little or no money in the first place. These cars were gotten in as trade ins on other cars. Any money that people got for them was off the inflated price for the cars bought.

[RogueMom]

Originally Posted by YNVVA

I enjoy seeing when people buy one rim at a time and have the pride to drive around without the full set.

And when they finally do get the whole set, they are oh-so-classy, aren't they? I mean, when I see them, I jus think to myself "Now there's a guy whose really made it", don't you?

[nealrm]

Originally Posted by MisterEd51

How is your credit rating affected? Do pawn shops actually report anything to credit agencies? All pawn shop loans are backed by collateral. In the case of a title loan the loan is backed by you car's title. If you don't pay they get your car.

One difference from regular loans is that if you default on a title loan the pawn shop gets to sell your car and keep all the proceeds. For example suppose you you borrow $500 and use your $5000 car as collateral. If you default and the pawn shop sells the car for $4000 they get to keep the difference. In other words they just netted $3500 on a $500 loan. Ouch!

You will notice I said title loan and not pawn shop.

[mth1954]

I say Thank God for pawn shops. They are good to have when you're down to nothing. I can think of 3 times when I needed about a hundred dollars on the spot and each time I was able to pawn my golf cubs and got between 70$, 90$ & 120$, depending on the circumstances of each situation. I always took the lowest amount because that would be an easier amount to pay back.

Yes they charge more interest and thats how they exploit poor people for the pawn shops profit, but then again, they're in the business to make money and we are a Capitalist Country, and this pawn shop business is Capitalism working at its best. Let the market decide who will be a success. Supply and demand. Under a Capitalist system, theres always going to be an abundance of poor people and lower middle class people. Supply and demand. Pawn shops will continue to be a good option for people who need the money now.

Theres a reason why most pawn shops are in poor neighborhoods. Thats where the business is And they are usually located in a small strip center where the other stores are Dollar General, a check cashing place, a place where they do women's nails, an income tax service place, and pizza delivery place, a rental center to rent tv's and furniture, a moneygram/money box type store, an off beat insurance company for drivers who have a hard time getting mandatory auto insurance from a high profile insrance company. And if there is a restaraunt, chance are good its gonna be cheap Asian restaraunt where u can get a good sized lunch for 4$.

But, if u see those stores clustered around one another, then you'll know your in a poor neighborhood, lower middle class at best.

.But when u need money on the spot, you'll be glad there's a pawn shop there.

[MisterEd51]

Originally Posted by nealrm

You will notice I said title loan and not pawn shop.

I know what you said. What's the difference? Under Alabama law people that make title loans are classified as pawnbrokers so are covered under the Pawn Shop Act.

If the title loan goes into default there is no problem as long as you turn your car into them with no problems. Since the most they will loan on a car title is about 50% of its value they normally should be able to sell it and make a profit. If they do lose money on it they will go after the borrower for the difference or turn that debt over to a collection agency. In that case it would be reported to a credit agency and hurt your credit. A couple reasons why they might lose money on the defaulted title loan are excessive damage to the car and extra costs if the car has to be repoed.

I have to emphasize only the amount that is lost is reported to the credit agency. The actual title loan default is not reported since technically it is not a loan. If nothing is lost then nothing is reported.

[YNVVA]

I did a rent to own on a nice Gateway with a 486 CPU and 128MB of RAM a few years back. Just paid it off last year. Still an amazing machine!

[Tourian]

Originally Posted by MisterEd51

The same is probably true for places that sell used cars. I know several people that have defaulted on car loans they got from a well known used car place on Sparkman Drive. This place didn't even go after them for the balance of the loans as long as they gave the cars back. I guess between the down payments and a few payments they made they got enough to cover the real value of the cars. As a bonus they got to sell the same cars again.

I forgot to mention that this place probably got these cars for little or no money in the first place. These cars were gotten in as trade ins on other cars. Any money that people got for them was off the inflated price for the cars bought.

That is true for buy-here-pay-here type of lots but not every new and/or used dealer employs those tactics. For a great many people this type of auto loan is their only choice other then walking.

[MisterEd51]

Originally Posted by Tourian

That is true for buy-here-pay-here type of lots but not every new and/or used dealer employs those tactics. For a great many people this type of auto loan is their only choice other then walking.

No matter where you buy your used car you still need to do your homework. You need to first do a little online research to see what the car is worth then you will have a target to negotiate towards. I use edmunds.com to get the average selling price of the car I want to buy. For example if the used car dealer wants $9000 for the car and edmunds.com says the car should sell for $6500 then that is the price you should negotiate towards. I bet too many people will just pay the $9000 for the car and only worry about what the payments are.

Also, try to have options for financing. Financing through the used car dealer is usually the most expensive choice.

[FTG-05]

Originally Posted by MisterEd51

Alabama has some of the weakest regulation of pawn shops so you can blame the legislature for that. I don't know if Huntsville could close down pawn shops but if it could what good what that do? They would just reopen in Madison county or some other nearby county. That would then just make people drive a little farther that is all.

Right now high school students are required to take a one semester economics course. I suggest they should also have a second required course on personal finance. Of course that would still not help the people that drop out of school.

You can have some regulations with regards to predatory practices but you can't expect the government to hold everyone's hand when people make all spending decisions. In a free country people have a right to be stupid. I don't see that changing any time soon.

Pawn shops have been around for over 3000 years so i don't see them going away any time soon. Eliminating them will just make activities like this move underground where there will be absolutely no regulations or consumer protections. Also some desperate people will be forced into illegal activities such as crime to get the money they want.

Like Dave Ramsey's FPU class. Of course the *******s would scream bloody murder because of Dave quoting the bible.

My son took it twice (or three times, can't remember). He just started college and is paying most of his own way including buying his own car - with cash.

[CoreLysium]

Originally Posted by Tourian

That is true for buy-here-pay-here type of lots but not every new and/or used dealer employs those tactics. For a great many people this type of auto loan is their only choice other then walking.

I see nothing wrong with "buy here, pay here" car places.

One of the most brilliant things, which many might consider exploitive, was a few years ago I saw an early 80's Honda Civic that leased out for $25 per week. "Great Pizza Delivery Vehicle" it said. And they're right.

I'm curious how that business experiment panned out.