Ohio Vehicle Lending Problem
Cash 4 Cars Akron will buy scrap cars in Copley, Springfield Township and Wadsworth. Speaking from someone who junks cars in NE Ohio, we realize that often spending a huge amount of money on repairing older vehicles–usually isn’t worth it. There is a choice to call someone who junks cars to handle junk vehicle removal. On November 22, 2015 a newpittsburghcourieronline.com article titled ‘Ohioans lose over $500 million to payday and car title loan fees’ was composed by Charlene Crowell with the following details: “Despite a landslide voter decision in 2008 to cap payday lending rates at 28%, the state’s small-dollar, high-cost lending has continued to grow. Each year Ohio consumers needing a small loan wind up with more than $502M in fees. The state regulators and legislature have the authority to enforce the voter-approved 28% cap, neither has exercised that power for seven years.
A new report, Buckeye Burden: An Analysis of Payday & Car Title Lending in Ohio, from the Center for Responsible Lending (CRL). The CRl says the majority of payday lenders now offer both payday & car title loans in OH. Predatory lenders are doubling their efforts to offer harmful products. Delvin Davis, a CRL researcher says payday and car title lenders exploit Ohio’s Second Mortgage Loan Act and Ohio’s Credit Services Organization (CSO) Act to continue their debt trap lending. In 2014, Ohio’s Supreme Court ruled the use of the Second Mortgage Loan Act by car title lenders was within the law; but did not address the CSO usage. In the meantime, high-cost lending in Ohio has grown to 836 storefront locations statewide that offer payday, car title loans – or both. Car title loans, typically due in 30 days, tend to be larger than payday loans, vary in amounts ranging from $1,000 to as much as $5,000, and terms up to several months. The only borrowers eligible for these are those who own a clear title to an automobile. The loan amount is a fraction of the vehicle’s value.
CRL’s report notes how car title loans don’t take into account a borrower’s ability to repay. Loan fees, however, will be swiftly accessed by car repossessions for title loans. If a title loan becomes delinquent, the lender can take the car. The CRL also urges CFPB to enact strong rules to end the debt traps generated by car title loans. Limiting the amount of time lenders can keep borrowers in debt and measures to stop re-borrowing or refinanced loans are measures they suggest. CFPB should take note that this is an industry that will find & exploit any angle to continue making predatory loans.” The complete article is available at this link.
Although we are in junk vehicle removal business, we are aware of the lousy cash for car title loan business. It is a fundamentally sad that the business even exists for the following reasons:
- The fact that there is so much demand for title loan businesses is a sign of a broader problem. These loan seekers are obviously in financial distress if they are getting loans against their transportation. If they were creditworthy they would use a credit card or borrow from a friend or family member.
- Many people simply do not save money. They lack any discipline or self-control exhibited by their inability to live below their means. It is not a poverty issue—it is poor judgment. The concept is simple, if you earn 20,000 a year, you should save 20% or $4,000 minimum. If you aren’t making enough to save 20%, then you need to lower your costs even further. (or increase your income)
- These title lenders are very calculating and have devised yet another way to exploit the low to lower middle class. It really is a sad state of affairs and the industry is reflective of our culture.
We Buy Scrap Cars
Cash 4 Cars Akron pays cash for wrecked cars and is a junk car hauler serving Summit, Portage and Medina Counties. People often ask who junks cars and how does it work? You simply call us @ (330) 271-6464 and we provide you a junk car quote right over the phone. Free junk vehicle removal (towing) is included and you MUST have the vehicle title in your name with matching ID. Here is the summary:
1. Call or send us the car info: Year, Make & Model of your car and summarize the condition.
2. Receive a junk car quote from us. You will receive a cash offer for your car
3. A junk car buyer will schedule a pick-up of your vehicle. A removal specialist will arrive.
4. Your car is towed and you get paid cash on the spot.