People losing their cars to car title pawns is a common belief, but new research suggests it’s not the case. While we’ve seen many stories of people looking for help on sites such as Reddit or Yahoo Answers because they had their cars repossessed by a title pawn company, there’s very little evidence that supports this claim.
The reason why these stories get so much attention is because of the emotional element involved in them. These stories tend to get a lot of views and comments which makes these articles popular and appealing to news outlets. Statistics for 2022-2021 show only about 4.64% default.
Since people are so easily swayed by shocking stories of repossession without understanding the issue in-depth or getting outraged at what might be an exaggerated or false claim, it starts affecting our ability to get accurate information sometimes. So, let’s get some facts straight: losing your car due to late fees on title pawns is extremely rare as long as you are making the minimum payment amount in a timely fashion.
If you want further proof that most borrowers know what they’re getting into, you only need to look at the default rate on these types of financing which has been estimated somewhere between 1-5%. What this means is that 95-99% of borrowers who take out a car title pawn do not lose their vehicles.
To prevent having your vehicle repossessed there are some things you should know and understand before taking car title pawns.
The truth of the matter is that people do lose their cars due to repossession, but they are usually at fault for borrowing too much money and then failing to make payments or clear up fees that were tacked onto their original pawn. What most articles fail to address is the idea that there are warning signs all over the place about borrowing too much on a car title pawn if you know where to look for them.
What people don’t understand is that it’s never wise to borrow any amount of money against your vehicle’s title unless you are 100 percent certain that you can pay it back by the due date, which is usually around 30 days.
Understanding how a title pawn works, what fees and interest are charged, how long you have to repay the money, how much you have to pay back, as well as how to work with the title pawn lender to prevent repossession can help you make an informative decision on whether a title pawn is a great option for you.
How Does a Title Pawn Work?
At Florida Title you can apply online and receive an email quote or you can stop by one of two locations (South or North locations). Our required documentation is minimal.
A Free and Clear Car Title:
- The title must be in your name. The vehicle also must be fully paid for.
Proof of residence & Income:
- Proof of residency can be provided by using a recent phone bill, utility bill, or even a bank statement that shows your current address. Proof of income can be provided using a pay stub or a bank statement.
Get a Quick 5-Minute Vehicle Inspection:
- A vehicle inspection allows us to estimate the equity value of your vehicle.
Valid Proof of ID:
- Using a valid driver’s license or state ID.
Sign for your pawn and get your funds:
- If approved, you can walk out with a check in hand.
What Fees and Interest are Charged?
Florida Title offers a 30-day interest-free promotional program (to qualify you must meet certain requirements). If you qualify and pay off the pawn in 30 days then you do not pay any interest. Certain amounts apply for this promotional program so ask us if you can qualify for the amount you are requesting.
If you do not pay in full within the 30-day promotional program interest is depending on the amount borrowed and the principal balance outstanding.
How Long Do You Have to Repay the Money?
At Florida Title you don’t have to pay off in the first 30-days You can pay off your title pawn whenever it is convenient for you as long as you are making your minimum payment but be aware the longer you have the title pawn the more it will cost to repay it.
How Much Do You Have to Pay Back?
As stated above this is depending on how much you borrow as well as how long it takes to pay it back.
Are There Options if I am Struggling to repay?
If you are struggling to repay there is a risk that you could lose your vehicle. If you are making the minimum payment there are options that you can extend your title pawn for an additional 30 days to prevent it from defaulting.
Fully understanding the above questions, as well as the terms of your agreement, are important to help prevent the loss of your vehicle.
If you still have some questions or concerns, please feel free to reach out to us via phone at (850) 458-2274 for the South location or (850) 456-2274 for the North location. You can also email us at [email protected].
We are here to help with your financial situation as well as ensure you understand all the terms of your agreement before you sign.