Title Loans, Playing With Fire!

Over the years we have purchased a good number of cars because of tile loans.  The customer needs extra cash and gets the title loan.  He can then afford the interest payments on the loan, but when the principal comes due, he isn’t able to afford it.  He then renews the loan again.  It becomes a vicious cycle.  He gets to a point and either sells the car to pay it off or trades it in on another car that has more manageable payments.

I saw one last week that stunned me.  I know the interest rates on these loans can be in the 300% annual range.  A person brought two documents in on her title loan.  She wanted help to bail it out.  The first document was about 10 days old.  It had a payoff of about 45,00.  The car was repossessed the next day.  The second document was the payoff after the repossession, the payoff was about $10,000.  How the payoff can double that quickly doesn’t make sense.  There  were repossession fees included, but only around $300.  The only thing reason that makes any kind of sense is if there was a penalty for early payoff included in the loan.

 There are a lot of varieties of title loan.  I do not know them all.   If you are going to get a title loan make sure you have read all the fine print.  Make sure you understand what could happen if you miss the payment.  I really, really felt bad for the person in this example who lost her car.  I hope she goes to the Department of Financial Services who regulate these companies to make sure everything the title loan company did was legal. 

Have You Ever Wondered?

Last week we got a beautiful 92 Mercedes 500SL convertible. Bright red, tan leather and 113,000 miles.  I haven't driven one of these for a while, but they are fun to drive.  This one is also very nice so it can also turn a head or two.  Saturday night my wife and I went to a movie.  As usual the parking lot was full but there was  valet parking available. Have you ever looked at the area around the stand where the valets work.  Usually the high dollar cars are parked right up close so the owners do not have to walk very far.  I told my wife "watch what happens".  She looked at me as if she was thinking "What are you talking about".  As we pulled up to the valet area, there were 5 or 6 cars waiting to be parked.  I noticed that there was an Escalade and another car parked right at the curb and there was a space right in front of it.  As we got out of the car the valet said, Its getting close to 8:00 and we will be leaving about 9:30 so what I will do is park your car right here up front and bring the key back to you so you won't have problems when the movie is over.  That's exactly what he did. The 5 or 6 cars in front of us sat while he moved ours to the place of honor.  I hadn't asked anything special, but I was impressed with what happened.