Car Title Loans Are Junk
The auto scrap market has nothing to exciting to report this week and the amount we’re offering to get cash for a car has lessened in response to global commodities pricing. As always, those wondering where to scrap my car or who scraps cars in NE Ohio should contact us here at Cash 4 Cars Akron. Our next topic is similarly related to the subject of where to get cash for a car, but different in that it doesn’t involve those of us who scraps cars—it involves getting a loan for the title of a vehicle. The auto title loan industry is yet another bad option from the same loving folks that brought us payday loans, credit card cash advances and bookmaking. In the November 4, 2015 edition of wmcactionnews5.com there was a story composed by Kontji Anthony titled ‘Trustee to unveil new option for fast cash customers’ with the following information: “Shelby County Trustee David Lenoir is taking a stand against fast cash shops and wants them closed. Memphis and Shelby County mayors announced a new tool that could help some Mid-Southerners’ dependency on the shops. An app called Bank on Memphis hopes to run the 263 check cashing & title loan shops in Shelby County out of business. Lenoir said the large amount of shops caught his attention–there is a dozen on one North Memphis block. The city of Memphis is 1st in adults who don’t have bank accounts and the fast cash lending is a cycle of debt, poverty & low credit scores. Check Into Cash Senior VP Jabo Covert says they do not prey on anyone and have broken no laws, the government sets prices and we follow every rule The Bank on Memphis ‘2nd chance banking program’ is a smartphone app with access to 14 banks offering small loans & peer-to-peer lending. One man, who did not want to be identified, said he is skeptical because he never had success with traditional banks. For some who want out of the fast cash cycle, it is a ray of hope.” The article is available at this link.
In October there was a series of articles called ‘Inside Virginia’s Car-Title Loan Industry’ on wamu.org. Michael Pope exposed the problem as follows: “Virginia is one of 21 states where businesses can offer loans for titles to cars. Residents from D.C. & Maryland flock to Northern Virginia — lured by quick cash; many fall into a debt trap. Critics of the industry say these businesses are predatory and take advantage of people. Those who defend it say they’re following VA law, which allows loans with interest rates of up to 264% in some cases, unlimited interest rates in other cases. Like all the victims they talked to, Waverly asked that we not use his last name. He agreed to meet in the parking lot of the TitleMax (TMX) in Richmond where he took out two loans. He learned about TMX by seeing the TV commercials offering the promise of quick cash, the he hit his shoulder, which brought medical bills he wasn’t able to pay. Waverly handed over the title to his 2000 Toyota Avalon in exchange for $600.
A man from TMX walked out of the building & confronted us in the parking lot saying we can’t do it here. TMX has an email set up for media inquiries, but as a matter of policy, don’t respond to inquiries from the media. Waverly and I move to the parking lot of an adjacent mall, where he tells me the rest. He says they offered an additional $2,000 and he signed new paperwork. This time it wasn’t a car-title loan, but a consumer-finance loan–completely different with fewer protections to consumers. These can be extended much longer and the interest is unlimited. What happened to Waverly shows the trend in car-title lending, as companies in VA move into consumer-finance loans. Documents from the State Corp. Commission show that the number of these loans tripled from 2013 to 2014. Del. Scott Surovell (D-44), whose district has become a hotspot for these businesses, says these predatory tactics and bait-and-switch tactics need to stop.
Jay Speer at the Virginia Poverty Law Center says 25% of these loans are now in default and the likelihood of default & repossession are high. Car-title lending isn’t legal in D.C., Maryland or NC, created a gold rush for the industry along the border areas. The origins date back to the early 2000s, when people were desperately in need of money. A new banking economy emerged at pawnshops, cash-advance companies, and payday lenders. New car-title products offered by businesses would be capped at 264% interest per year. In 2002, payday loans soared to $165M. By 2008, the businesses loaned about $1.3B, prior to 2008 when lawmakers capped the annual percentage at 36%. Since 2010, the number of locations offering car-title loans has increased more than 500%. The series of articles can be read in their entirety here.
Who scraps cars in Akron?
Cash 4 Cars Akron is involved in the auto scrap market as an outfit through which you get cash for a car. Those of us who scraps cars will tell you that regardless of where to scrap my car location you choose—it will bring you less money than it did last year. The auto scrap prices have been in a relative free-fall the last few months. Those living in the Merriman Valley, Bath, or Stow that are trying to determine where to scrap my car, need not look further. To get a price for a damaged car in Monroe Falls, Green or Tallmadge, simply contact our “fast cash for cars” office at (330) 271-6464. Even if your vehicle is currently disabled in an area such as East Akron, Kent and Peninsula, we will pick it up.