THE BLOG

25
May

Arizona Car Title Loan Laws

Arizona Car Title Loan Laws

Arizona and Repossession Laws

Arizona car title loan law states that if you are in default (i.e. aren’t making your monthly payments), then the title loan lender can take possession of your car even if they don’t have a court order to do so – as long as they don’t “breach the peace”.1)A.R.S. § 47-9609

California Title Loan Business Startup

Start a Title Loan Biz

The Arizona title loan lender statutes don’t define what it means to “breach the peace” but the general rule is that the creditor cannot utilize force or threats, cannot enter a debtor’s residence without consent, and cannot seize any property over the objection of the debtor.”2)Repossessions, National Consumer Law Center, 7th Ed..

Arizona courts have ruled that title loan lender repo agents cannot bring a police officer with them when they come to repossess the car, even if the police officer does nothing but stand there – and if they do it invalidates the repossession. 3)See Walker v. Walthall, 121 Ariz. 121, 124 (1978)

Other courts have held that the following actions “breach the peace”:

  • Grabbing keys from the debtor and twisting their wrist;
  • Pushing a door open and striking the debtor in the stomach;
  • Touching a resisting debtor to any extent;
  • Towing a car away while the debtor is inside it, despite their protests;
  • Running over the debtor’s foot with a car and flashing a gun;

Your Remedies for Unlawful Repossession in Arizona

So what happens if a title loan lender creditor doesn’t follow the law and breaches the peace while they are repossessing your vehicle?  First, repossession can be invalidated and you can get your car back.  Second, you can seek payment of damages based upon Arizona statute and the actual damages you incurred.

Is It a Crime in Arizona to Not Turn Over Your Car?

Yes but with caveats. It’s not unusual for title loan lenders in Arizona to think it’s ok for their repo agent to take a borrower’s car and told tell them if they didn’t turn the car over they could be charged with a felony and face jail time and fees.

It is true that Arizona has a law4)A.R.S. § 13-1813 that makes it a felony to unlawfully fail to turn over a car that is subject to a security interest but there are very specific requirements that must be met first before you could be charged with a crime:

  1. First, you must be at least ninety (90) days past due;
  2. Second, the bank, title loan lender (or other lender) has sent you written notice via certified mail return receipt, that you are ninety (90) days late in making a payment and are in default;
  3. You fail to get caught up on the payments within the next thirty (30) days.

Only if all three of these elements are met and then you fail to turn the vehicle over do you run the risk of having a felony charge. And be aware the Maricopa County Attorney’s Office rarely prosecutes these as crimes.

Title loan lender repo agents throw this statute around as if merely refusing to turn a car over results in a felony charge.

19
May

CFPB Car Title Loan Study

CFPB Car Title Loan Study

“About 1 million households use car title loans annually, according to the Federal Deposit Insurance Corp., and the Pew Charitable Trusts figures that consumers spend approximately $3 billion annually in fees.”

“The CFPB car title loan study also found that four-in-five car title loans aren’t repaid in a single payment as intended because the borrowers can’t afford to do so. Instead, those consumers renew their car title loans the day they are due. For more than half of the car title loans, borrowers take out four or more consecutive loans.”

The CFPB car title loan study found that these car title loans often have issues similar to payday loans, including high rates of consumer reborrowing, which can create long-term debt traps. A borrower who cannot repay the initial loan by the due date must re-borrow or risk losing their vehicle. Such reborrowing can trigger high costs in fees and interest and other collateral damage to a consumer’s life and finances. Specifically, the study found that:

  • One-in-five borrowers have their vehicle seized by the lender: Single-payment auto title loans have a high rate of default, and one-in-five borrowers have their car or truck seized or repossessed by the lender for failure to repay. This may occur if they cannot repay the loan in full either in a single payment or after taking out repeated loans. This may compromise the consumer’s ability to get to a job or obtain medical care.[Note: This number is highly suspect! How the CFPB determined this percentage is anyone’s guess. For us, it’s closer to 5%.]
  • Four-in-five auto title loans are not repaid in a single payment: Auto title loans are marketed as single-payment loans, but most borrowers take out more loans to repay their initial debt. More than four-in-five auto title loans are renewed the day they are due because borrowers cannot afford to pay them off with a single payment. In only about 12 percent of cases do borrowers manage to be one-and-done – paying back their loan, fees, and interest with a single payment without quickly reborrowing.
  • More than half of auto title loans become long-term debt burdens: In more than half of instances, borrowers take out four or more consecutive loans. This repeated reborrowing quickly adds additional fees and interest to the original amount owed. What starts out as a short-term, emergency loan turns into an unaffordable, long-term debt load for an already struggling consumer.
    • Vehicle title loans typically have terms of about a month to conform to laws in many states that specify allowable loan terms. For example, at least 8 states—Alabama, Georgia, Idaho, Mississippi, Nevada, New Hampshire, South Dakota, and Tennessee—set a maximum loan term of about 30 days (or one month), although loans can be renewed beyond this initial term.
  • Borrowers stuck in debt for seven months or more supply two-thirds of title loan business: Single-payment car title lenders rely on borrowers taking out repeated loans to generate high-fee income. More than two-thirds of title loan business is generated by consumers who reborrow six or more times. In contrast, loans paid in full in a single payment without reborrowing make up less than 20 percent of a lender’s overall business.
    • Single-payment vehicle title loans are available in 20 states. Thirteen states allow lenders to offer both singlepayment and installment vehicle title loans, and five states only allow these loans if they are repayable installments.

“Today, we are releasing our fourth report on this market, which is a study of single-payment auto title loans. Our study analyzed nearly 3.5 million loans made to more than 400,000 borrowers over a period of several years. We examined loan usage patterns, with a focus on the repeated use of these loans, how long it takes borrowers to repay, how often they fall behind, how many borrowers default, and how many have their vehicle seized by the lender. ”

“A typical single-payment auto title loan is taken out by a borrower to cover a cash-flow shortage between paychecks or other income. Borrowers who own their vehicle outright can put up their auto title for collateral in exchange for a loan. If the loan is repaid, the title is returned to the borrower. This credit is costly, as it is typically set at an annualized interest rate around 300 percent. Single-payment auto title loans are available in 20 states; another five states allow only auto title installment loans. ”

“Our report also found that few of these so-called single-payment loans are actually resolved with a single payment. These loans typically have a 30-day term, and most borrowers cannot afford to repay what they owe when the time comes.  In fact, our report found that more than four out of five auto title loans are reborrowed on their due date, rather than paid off. Only about 12 percent of borrowers manage to be one-and-done – paying back their loan, fees, and interest in a single payment without borrowing again soon afterward. ”

“Most borrowers resort to rolling over loans through repeated reborrowing, paying high fees each and every time. More than half of single-payment title loans lead to reborrowing three or more times after their first payment is due, and fully one-third are reborrowed six or more times.”

“In fact, auto title lenders typically generate about two-thirds of their business from the borrowers who end up being mired in debt for most of the year.”

“These loans thus present issues that are similar to those we have found with payday loans. High rates of reborrowing drive up costs, with the consumer eventually paying interest and fees that are far more than they expected. Indeed, for a sizable percentage of borrowers, the fees and interest exceed the amount of the initial loan itself. The Bureau has consistently recognized that consumers may need affordable credit to cover emergency expenses. If the product is structured to make repayment realistic, then such loans may help tide consumers over in their time of need. But if the payments are not affordable, those in a financial jam with nowhere else to turn may find themselves on a perpetual treadmill of debt, laden with mounting costs that disrupt the precarious balance of their financial lives. Although these products are usually marketed for short-term financial emergencies, the long-term costs of such loans often just make a bad situation even worse. ”

Title Loan Business

Title Loan Business

Like payday loans, vehicle title loans are made by non-depository lenders. The cost is typically expressed in dollars per $100 borrowed, and annual percentage rates (APRs) are in the triple digits. However, there are several key differences between the two products. While the repayment of a payday loan is timed to coincide with a borrower’s payday or other income receipt, car title loans are due in about a month regardless of the borrower’s pay frequency. In addition, instead of giving the lender a post-dated check or authorizing the lender to withdraw payments from a bank account, a vehicle title borrower provides the lender with the title to her car, which generally must be owned free and clear.5 The vehicle’s value is the primary consideration for the amount that can be borrowed. 6 Although the borrower retains use of her car while the loan is outstanding, a lender can repossess and sell the vehicle to satisfy the amount owed if loan payments are not made on time. Because account access is not required, vehicle title borrowers may not have an account with a bank or credit union. Finally, while payday loans are offered both through storefronts and online, vehicle title lending is typically conducted in storefronts so that the lender can assess the vehicle’s condition.

Link to original CFPB Study on car title loan businesses.

19
Apr

Title Loan Companies are Profitable?

So… you’ve been “googling” for weeks trying to figure out if a car title loan business you’ve been thinking about starting is gonna make money.

Title Loan Companies Profitable?

You see the title loan stores all around you. Maybe you’ve even noticed a few new title loan companies opening up in your city.

Do Title Loan Stores Make Money?

Let’s take a look at some real world numbers:

A title loan customer walked into our California store after “finding” us on her phone. [Yep, it’s important your website look great on a cellphone!]

She had a job and a 2009 Toyota 4Runner with 84,000 miles loaded with equipment. This truck was in fair shape. Low book value was close to $15K. She needed $3000 for 30 days. She had a clear title…

How could we go wrong in this scenario? We couldn’t! In Calif., under the Department of Business Oversight CFL licensing rules, we can charge whatever interest rate we choose to. Of course, as so often stated in our “Car Title Loan Training Manual,” we know what our competitors are charging because we mystery shop them monthly.

So… $3000 at 9% per month is what we proposed. She accepted. For the math challenged – like me – that works out to $270/month in interest for as long as she chooses to keep our $3000.

That’s $270/month for a car title loan month after month until she pays back our $3000 loan principal. So, she could conceiveably pay us $270/month for 8 months, as just one example, $2160 in fees AND still owe us $3000! Let’s not forget we have the title to a truck worth at least $12K in a fire sale!

Now, every State is different. [We have the car title loan State license applications and fee structures for every State these loans are legal in.]

Car title loan fees in the USA range from 3%/month to 25%+ per month!

It doesn’t take much of an imagination to realize that if in California, for example, we have $100,000 “on the street” in the form of car title loans earning 9% per month in gross fee income that equals $9,000/month. If our title oans average $3000, we only need 33 title loans; that’s ONE PER DAY. You think one employee can handle this volume 🙂 Will your city demographics support this?

Car title loan monthly store expenses:

  • Rent = $750
  • Employee (22 days/month at $20/hr all in = $3520 [High]
  • Insurance, advertising, phones, software, licenses, accting, etc. = $500
  • Misc. B.S. = $200/month
  • NET before taxes = $4000/month ABSENTEE OPERATED = $48K/year
California Title Loan Business Startup

Start a Title Loan Biz

Now, this takes care of all your fixed costs. What if, after working your ass-off or an investor came forward, you could put together another $100K to “work on the street.”

$9,000 per month less your variable overhead = roughly $75,600/year + the $48,000/year totals $123,600! Recall that you would certainly not need another employee for this scenario!

So… YES! CAR TITLE LOAN LENDING IS PROFITABLE!

More info? Jer@AutomobilePawn.com 702-208-6736

 

29
Mar

Are Title Loan Franchises Profitable?

Title Loan Franchises Profitable!

Are car title loan businesses profitable? Is buying a title loan company franchise necessary?

Here’s your next installment of our Car Title Loan Business mini-course.

Car Title Loan non-franchise company profits: (See our actual financial metrics below.)

$50,000 in car title loans “on the street.”

Each “Title Loan” principal avg. = $1185.

Total car title loans outstanding = 42

Fees = $25/$100 loan principal. $12,500/month gross fee income.

So… the question you have to ask is “Can I achieve $100,000 “on the street” eventually? In my town? At this rate?

That’s $25,000 per month in gross income plus late fees, revenue generated from other services you offer such as tax returns, bill pay, money transfer, money orders…

Car title loan franchise profitable

Title Loan Business

Following our guidelines on our AutomobilePawn.com website at http://www.AutomobilePawn.com you can hit these numbers with 1.5 employees and run this location from anywhere via the Internet.

Overview of the Car Title Loan Industry

Known as title loans, pink slip loans, title pawn loans, car-title-loans, auto-title, automobile title loans, title loan business, motor vehicle equity lines of credit… Basically the borrower offers the title of their vehicle as collateral for a loan. The traditional car title loan is similar to a payday loan in that they are typically single-payment loans with one month terms. At the end of each term, the car title loan is renewed by paying the fees due. In many cases, the borrower will “pay-down” a portion of the principal due as well.

A title loan is a way for a consumer or small business owner to borrow against the equity in their motor vehicle.

Most title loan customers do not own real estate so their vehicle is their most valuable asset.

Typically these are small loans. The USA average is less than $1000.

Like payday loans, car title loans are marketed as small, quick and easy emergency loans.  The major differences are the car title loan is collateralized (Collateral: assets pledged by a borrower to secure a loan or other credit, and subject to seizure in the event of default) by a vehicle (car, boat, RV, motorcycle…) and, in many states, the maximum loan amount is set higher by statute.

Loan terms vary depending on state or provincial statute as well.  30 days is typical but terms do vary by geographic area.  Refer to the State Laws Sections at the end of this Manual for specific data.

The finance charge is simple interest.

Rarely are there fees, points, penalties, hidden charges, etc.  Rates are commonly in the range of 25% interest on the principal for a 30 day period.

Credit reports are not used to determine whether an auto title loan customer will qualify.  Generally the critical factors are:

  •  Value of the collateral. It must be 100% unencumbered. Or, you can use a portion of the loan principal to pay off any liens in order to “clear” the title. This is a hassle but many car title lenders will “jump through the hoops” when the collateral is highly      valued. Examples? Trucks, RV’s, boats, high-dollar sports cars…
  •  Ability of the auto title loan customer to make the payments.  Contrary to what the consumer protectionists’ claim, we do want our customer to successfully pay us back!

There are two auto title loan models we use:

  • Auto title loan: we take possession of the unencumbered title or “pink slip” to the vehicle.  The consumer continues to maintain possession and drive the car.
  • Auto pawn: we take possession of the vehicle and store it.

This Manual is appropriate for both approaches. The major differences are fees imposed on the borrower and the specific license issued by your state or province to carry out each activity.

Car Title Loan Metrics (Avg. for Trihouse Consulting & Clients)

Median Loan Principal: $1185

Median Car Value (Low Kelly Blue Book): $3285

Median Loan to Value Ratio: 32%

Median APR: 300%

Avg. Number Repos/100: 4.5

Avg. Number Rollovers: 8

Typical Costs for U.S. Borrower

  • Average “low book” value: $2800
  • Average loan principal: $1185
  • Principal and fees due in 30 days: $1481.25 ($296.25 fee + $1185 principal)
  • Average  loan fee: 25% per month
  • Average  total: fees paid (8 rollovers) $2370
  • Total paid in principal & fees (8 rollovers: $3555

NOTE: often additional DMV & Reg. fees. Depends on State/Province.

So… should you buy a car title loan franchise? We say no. Take the $25K to $45K franchise fee and loan it out instead in the form of car title loans. Depending on your State, these funds will put another $2000 to as much as $11,250+ on your top line income statement!

Jer@AutomobilePawn.com

Tactics & Strategies for Title Loan Lenders http://www.AutomobilePawn.com

702-208-6736 [10 AM – 4 PM PDT]

 

27
Jul

Title loans to Military Members-CFPB Letters Issued

Military title loan interest rates: CFPB sends warning letters to lenders regarding military allotment practices.

Military Title Loan Interest Rates Charged.

The CFPB announced that it sent warning letters this month to several companies that sell retail goods to military service members regarding their acceptance of payments made through military allotments. The military discretionary allotment system allows service members to automatically direct a portion of their paychecks to financial institutions or others of their choosing. This includes car title loan lenders. Effective January 1, 2015, Department of Defense rules were changed to prohibit active duty service members from using allotments for the following types of purchases:

  1. Vehicles, such as automobiles, motorcycles and boats
  2. Appliances or household goods, such as furniture, washers and dryers
  3. Electronics, such as laptops, tablets, cell phones and televisions
  4. Other consumer items that are tangible and moveable.
How to Start Title Loan Business

Start a Title Loan Biz

A sample CFPB warning letter advises that the Consumer Financial Protection Act “prohibits unfair, deceptive, and abusive acts and practices in connection with any transaction with a consumer for a consumer financial product or service, or the offering of a consumer financial product or service.” It also includes the following statement:

“According to your website, ————– seems to be offering
active-duty service members the option to repay loans by military allotment even after January 1, 2015, when the Department of Defense prohibited service members from allotting their pay to buy, lease, or rent personal property. We have not determined whether your conduct violates the CFPA, but we urge you to review your practices to ensure that you comply with all relevant laws.”

This notice does not waive the Bureau’s right to take action based on any violations of Federal law, including violations related to the conduct described above.

In December 2014, the CFPB announced the settlement of a lawsuit filed against a retailer selling merchandise online and in retail stores located near military bases that offered financing through retail installment contracts for alleged unlawful debt collection practices. The lawsuit included claims of alleged unfair conduct by the retailer in connection with the acceptance of payments made through allotments. In April 2015, the CFPB announced a settlement with two companies that processed military allotments and were alleged to have charged fees to service members that the companies failed to adequately disclose.

Do you want to get into the car title loan business? Tired of spending hours on Google looking for answers to your question, “How to start a title loan business.” Get our 300+ page startup Manual delivered to your inbox now! Here’s a list of all the chapters we cover: “How to Start a Title Loan Business.”


We offer 2 methods to invest in our “How to Start a Car Title Loan Business:”

  • Immediate download in Adobe Acrobat: $237.00
  • We’ll print and ship it to you: $367.00


25
Jul

How to Start a Car Title Loan Business in California

How to Start a Car Title Loan Business in California

The Title Loan Industry is Growing in California

The California Department of Business Oversight issued a Report that concluded California’s car title loan market loan transactions more than doubled between 2011 and 2014 to 106,373.

Car title loans are collateralized loans in which a borrower puts up the title to their automobile in return for a loan. In California, lenders must have a California Finance Lender’s License (CFL), a bond, and loan a minimum of $2501.

For entrepreneurs, the most appealing aspect of entering the car title loan industry in California is that the interest that can be charged by the lender is not specified by the State. In California car title loan stores we charge between 8% per month and 24% per month interest. The rate depends on a number of factors. How to start a title loan business Car title loans are offered to Californians via the Internet as well. The DBO sent out an alert last December noting that California car title loan lenders can legally charge unlimited interest rates on most loans since California state law imposes no minimum or maximum interest rate restrictions on loans of $2,500 or more. In 2014, 99 percent of all title loans made were for at least $2,500, the DBO said.

Car title loan borrowers must be made aware that the lender can repossess the automobile if a borrower fails to make payments per their loan contract.

The California Department of Business Oversight stated that the State’s No. 1 auto title lender leader in volume in 2014 was Loan Mart with 9,827 loans.

Are you an entrepreneur interested in starting a car title loan business? Are you frustrated with “Googling” all day and night to get the answers you need? Do you value your time? If you’re ready to get down to the “brass tacks” and start your own title loan business, get our “How to Start a car Title Loan Business Manual” delivered to your inbox NOW! It’s available as an immediate download in Adobe Acrobat. Want the “printed and shipped version” instead? We’ll take care of it for you. Pick your poison here! Get Our Manual

  • Immediate download in Adobe Acrobat: $237.00
  • We’ll print and ship it to you: $367.00


Title Loan Business

Title Loan Business

25
Jul

How to Start Title Loan Business in Alabama

How to start a Title Loan Business in Alabama

How to Start a Title Loan Business

How to Start a Title Loan Business in Alabama

A common question regarding how to start a car title loan business in Alabama or any other State often begins with title topics. How does a car title loan lender put the loan collateral (the car, motorcycle, RV, boat…) in the lender’s name? How to make certain a title is “clear?” How to make certain the title loan borrower applicant is really the legal owner of the collateral?

Of course, all these questions are answered in our “How to Start a Title Loan Business Manual.” Much of the work we put into our “Manual” is a result of spending many man hours on the DMV websites of all 50 States. And, we’ve learned a LOT about cat title lending as a result of operating our own stores and Internet portfolios. How to start a title loan business

Below, is a list of frequently asked questions regarding “titles” for the State of Alabama.

Alabama Vehicle Title FAQs

What year model motor vehicles does the State of Alabama title?

Where do I apply for an Alabama certificate of title?

What does it cost to make application for Alabama certificate of title?

What documents will I need to make application for Alabama certificate of title?

How long does it take to receive an Alabama title?

My lienholder is currently holding an out of state certificate of title to my vehicle. How can I apply for Alabama certificate of title when I do not have the outstanding certificate of title to surrender?

How do I apply for a replacement title?

I satisfied the lien on my vehicle and received the Alabama certificate of title with the lien released on the certificate of title. However, I subsequently lost the title. Why do I need a lien release in order to apply for a replacement Alabama certificate of title?

What year model motor vehicles does the State of Alabama title?

Every motor vehicle not more than 35 model years old which is domiciled in Alabama and is required to be registered in Alabama is required to have an Alabama certificate of title. Travel trailers and folding and collapsible camping trailers not more than 20 model years old also are required to have an Alabama certificate of title. Manufactured homes not more than 20 model years old are also required to be titled.

ALABAMA TITLE DEFINITIONS: The term motor vehicle shall include every automobile, motorcycle, mobile trailer, semitrailer, truck, truck tractor, trailer and other device that is self-propelled or drawn, in, upon, or by which any person or property is or may be transported or drawn upon a public highway except such as is moved by animal power or used exclusively upon stationary rails or tracks. Every trailer coach and travel trailer manufactured upon a chassis or undercarriage as an integral part thereof drawn by a self-propelled vehicle.

EXCLUSIONS: No Alabama certificate of title shall be obtained for:
(a) A motor vehicle more than 35 model years old or trailer more than 20 model years old.
(b) A vehicle owned by the United States or any agency thereof.
(c) A vehicle owned by a manufacturer or dealer and held for sale, even though incidentally moved on the highway or used for the purpose of testing or demonstration, or a vehicle used by a manufacturer solely for testing.
(d) A vehicle owned by a non-resident of Alabama and not required by law to be registered in Alabama.
(e) A vehicle moved solely by animal power.
(f) An implement of husbandry.
(g) Special mobile equipment.
(h) A pole trailer.
(i) ATVs.
(j) Snowmobiles.
(k) Off road vehicles.
(l) Junked vehicles.
(m) Boats.
(n)Mobile homes, travel trailers, and mobile trailers designated 1989 year models and prior year models.
(o) Utility trailers. A utility trailer is a vehicle without motive power designed to be drawn by a passenger car or pickup truck.
(p) A folding or collapsible camping trailer more than 20 model years old.
(q) A vehicle for which the Alabama license plate issuing official has verified that the current owner or operator is recorded as the owner or operator on a currently effective certificate of title issued by another state and the certificate of title is being held by the recorded lienholder.

Where do I apply for an Alabama certificate of title?

Applications for Alabama certificate of title must be made through a Designated Agent of the Alabama Department of Revenue. Designated Agents include: County License Plate Issuing Officials, all licensed Alabama motor vehicle dealers, and some financial institutions located in Alabama such as banks and credit unions. An application for replacement title can be submitted directly to the Alabama Department of Revenue by the recorded owner(s) or lienholder.

What does it cost to make application for Alabama certificate of title?
The title application fee is $15.00 for each application for Alabama certificate of title for a motor vehicle. The title application fee is $20.00 for each application for Alabama certificate of title for a manufactured home. Designated agents shall add the sum of $1.50 as the commission for each application processed. County License Plate Issuing Officials may also collect an additional $1.50 commission for each application processed to defray the cost of processing and mailing title applications. Certain counties may also have local fees which are due when an application for title is processed by that County License Plate Issuing Official. Please contact the County License Plate Issuing Official to determine if any local fees apply.

What documents will I need to make application for Alabama certificate of title?

An applicant for Alabama certificate of title must surrender the following documents to the designated agent in order to complete an application for Alabama certificate of title: (a) the outstanding manufacturer’s certificate of origin or certificate of title that is either in the applicant’s name or assigned to the applicant and any documents which support the transfer of the vehicle to the applicant; (b) if the vehicle is currently registered in a jurisdiction which does not title such vehicles, the applicant must surrender the outstanding registration documents which substantiate ownership of the vehicle. Additional documentation may be required if it cannot be determined whether the vehicle meets federal and state safety, emmissions and anti-theft standards.

How long does it take to receive an Alabama title?

Processing times may vary. If you have not received your Alabama title within a reasonable time period, please contact the Designated Agent that completed your title application for assistance. If the Designated Agent cannot provide assistance, you may contact the Title Section at titles@revenue.alabama.gov.

My lienholder is currently holding an out of state certificate of title to my vehicle. How can I apply for Alabama certificate of title when I do not have the outstanding certificate of title to surrender?

No certificate of title shall be issued for a vehicle for which the Alabama license plate issuing official has verified that the current owner or operator is listed on a currently effective certificate of title issued by another state and the certificate of title is held by a recorded lienholder.

A vehicle normally subject to the Alabama title law would be required to registered without obtaining an Alabama certificate of title first if all of the following requirements are met:
The registrant is listed as the owner or operator on the out-of-state title.
There is a lien recorded on the out-of-state certificate of title.
The title is being physically held by the lienholder and the title was not issued by one of the states listed below.
The vehicle’s owner must provide to the county licensing official a copy of the certificate of title or a print out of the title record from the state if it issues the title in electronic format.

The following is a list of states that sends the valid original title to the owner and not to the lienholder.

Applicants from these states must surrender the out-of-state title to the license plate issuing official and their vehicles will be required to be titled in the State of Alabama:
Kentucky
Maryland
Michigan (unless owner authorizes title to be mailed to lienholder)
Minnesota
Missouri
Montana (unless owner authorizes the mailing with signature)
New Jersey
New York
Oklahoma
South Dakota (unless owner indicates that title is to be mailed to lienholder)
Wisconsin
Wyoming (title may be mailed to either the owner or lienholder as requested)
If the owner has requested that a Michigan, Montana, South Dakota or Wyoming title be mailed to the lienholder, the owner must provide documentation from that state that title was mailed to the lienholder in order to be exempt from titling the vehicle in the State of Alabama.

How do I apply for a replacement title?

An application for replacement title can be submitted directly to the Alabama Department of Revenue by the recorded owner(s) or lienholder. The application fee is $15.00, non-refundable. In addition, an application for replacement title can be processed by any designated agent.
I satisfied the lien on my vehicle and received the Alabama certificate of title with the lien released on the certificate of title. However, I subsequently lost the title. Why do I need a lien release in order to apply for a replacement Alabama certificate of title?

At the time that the lien was released the Department was not notified of this fact. Therefore, when the Alabama certificate of title was lost so was the lien release.

24
Jul

11 Strategies for How to Start a Car Title Loan Business

11 Strategies for How to Start or Improve a Car Title Loan Business

Car title loans are a fact! Consumers need access to small dollar loans. Fast! Emergencies of all kinds pop up. It’s been said that 50% of U.S. residents cannot get their hands on $1000 in an emergency. Here’s a basic breakdown regarding “How to Start a Title Loan Business.”

Lacking friends and family who haven’t already been “tapped out,” a common method for solving these temporary liquidity challenges is to use the title or “pink slip” to their car to borrow some bucks.

These are high interest loans! They do not come cheap. Depending on the state, a car title loan operator will charge heavy fees for the convenience of servicing a car title loan customer in need of quick cash.

How much you ask? Let’s look at California. The rates for car title loans under the California Financial Lenders license (CFL) is not regulated for title loans above $2500.

California title lenders are currently charging 8% to 20%+ per month on the outstanding loan principal.

What’s this mean? A $3000 loan using a car title as collateral, at an 8% simple interest rate, would dictate the borrower will pay the title lender operator $240/month each and every month until the $3000 balance is paid back in full. So, if the car title lender borrower needs 10 months to payback the $3,000, that’s $2400 in fees paid to the owner of the title loan business plus the $3000 original loan principal.

How to start a car Title Loan Business

If the borrower fails to make their payments, the title loan business owner will make a call, have her repo company pickup the car, deliver it to the nearest auction and be rid of it. After paying the auction any reconditioning and auction fees, the title loan operator will deduct the amount owed by the car title loan borrower and mail any balance to the title loan borrower.

Entrepreneurs reading this typically experience delirium when contemplating the profit potential.

So, “How do you start a Car Title Loan Business?”

  1.  Look around you! Is there a car title loan business in your city? In your state? If yes, keep going. If not, there must be a problem. Perhaps car title loan businesses are illegal. Believe me! There is so much money to be made lending cash against car titles that if it isn’t already being done in your state, there must be a law against it. Find out!
  2. Walk into a competitor’s store. Look over all the walls. There is bound to be references to the legal authority granting this competitor the ability to offer car title loans. Usually, you’ll see an 800# to your State’s office of business licenses or perhaps your State Dept. for Business Oversight. Every state has a different name. Just get the number and make the call. Call and call until you get the right person. (Or refer to the Chapter in our “How to Start a Car Title Loan Business” focused on licensing in each state.)
  3. You may need a “Bond” in addition to a “License.” Use Google to find a “Bond” or pick an insurance company out of our “Manual.”
  4.  Get a car title loan from your “biggest – baddest” competitor. Use their forms and contracts to start. Have them customized by your own lawyer. (Or use the ones in our “Manual.”) GO THROUGH THE LENDING PROCESS WITH YOUR COMPETITOR! See what it feels like. Taste it. Ask questions. This is a CRITICAL moment; an opportunity to decide if you really want to proceed building a car title loan business.
  5. Learn what the minimum and maximum rates/fees are that can be charged to customers for car title loans in your state.
  6. Pick a name for your car title business. Use keywords in the title. Allow your company name to reflect what your business does. “Fast Title Loans” for example. Add the name of your city or state. Go to your county clerk and register this name. You’ll need to run this filing in your local newspaper to open a bank account. Fees are minimal.
  7. Make certain you create a business entity; an LLC, a C-Corporation, an S-Corporation, a DBA… check with your tax person and your accountant your lawyer… (If you have our “Manual,” just follow our instructions and reach out to the resources given.) You must assemble a small Team of experts in each of these fields!
  8. Get a location. You’ll need high traffic, great signage, convenient customer parking, and a good lease with an opt-out clause. (See our “Manual”. We have a lengthy Chapter devoted to this topic.) As we talk about in our “Manual,” your IDEAL location is inside a Walmart 🙂
  9. Get some great loan management software! This will cost you $100 – $200/month. It’s a MUST investment. Make certain it’s “cloud” based. Make it easy to run your business from an office, a store, or out in the field. If you offer the advantage of being able to meet your customers at a Starbucks, a parking lot, their employer’s place of business… you can beat the pants off your competitor. (See our “Manual” for loan management software providers we use and recommend.)
  10. Market the hell out of your new car title loan business! Your sign, Google PPC, Craigs list, twitter, Facebook, Pinterest, LinkedIn, direct mail, radio, TV, a mobile friendly website… Again, all this is thoroughly covered in our “How to Start a Car Title Loan Business.”
  11. Your next job? Collections! This is where it gets tricky. It’s easy to give away your money to anyone who can fog a mirror. But how do you handle the late-payers and those customers who had no plan to pay you back in the first place? Avoiding this “collection” problem begins the very first time you lay eyes on this borrower. We call this “underwriting.” This is a huge subject. Over the past 20 years, we’ve developed strategies, tactics, tools, data bases and resources to deal with this reality. BIG TOPIC! See our “Manual.”

Sorry! This is a HUGE topic. We’ll continue  “How to Start or Improve a Car Title Loan Business” in our next installment. Or, you may invest in our Manual by clicking here: “Trihouse Car Title Loan Manual.”

How to start a car Title Loan Business

22
Jul

FTC Has Lead Generators in Crosshairs Again

FTC Announces Workshop to Examine Online Lead Generation

Title Loan Marketing -Lead Generators

The Federal Trade Commission will hold a workshop on October 30, 2015, to explore the growing use of online lead generation AND TITLE LOAN MARKETING in various industries, including consumer lending and education.

How to Start Title Loan Biz

Click to Buy

Lead generators identify or cultivate consumer interest in a product or service, and sell the consumer “lead” information to third parties. For example, as consumers search the Internet for goods and services, they may express interest in specific topics, such as educational programs, mortgages, or small-dollar loans, and submit their personal information to the lead generator. The consumer leads sometimes contain sensitive personal and financial information that may travel through multiple online marketing entities before reaching the desired business.

The workshop, “Follow the Lead: An FTC Workshop About Online Lead Generation,” will gather a variety of stakeholders, including industry representatives, consumer advocates, and government regulators, to discuss consumer protection issues raised by the practices of the lead generation industry, such as:

How online lead generation works and its variations, depending on the industry, What types of lead generation conduct may be unlawful under the FTC Act’s prohibition against unfair or deceptive practices, Best practices for entities that generate and sell consumer leads, and How consumers can avoid unlawful conduct in the online marketplace.

The FTC is seeking research, recommendations for discussion topics, and requests for panelists in advance of the workshop. Please email any relevant information to leadgen@ftc.gov by August 25, 2015. The deadline to submit public comments about the workshop is December 20, 2015. Comments can be submitted electronically.

The workshop, which is free and open to the public, will be at the Constitution Center, 400 7th St., SW. The FTC will publish a detailed agenda at a later date. Reasonable accommodations for people with disabilities are available upon request. Requests should be submitted to Fawn Bouchard at Fbouchard@ftc.gov or 202-326-2743. Requests should be made in advance and include a detailed description of the accommodations needed and contact information.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.

Are you in the title loan business? Want more leads? Need how to learn all about buying and selling title loan and payday loan leads? Get our newly updated book immediately delivered into your email inbox: How to Start a Car Title Loan Business

Title Loan Business

Click to Buy Now

21
Jul

Title Loan Profits

Car Title Loan Profits

How profitable is a title loan business? What can a car title loan business owner expect to make by lending borrowers money in return for the title to their car?

Triple digit annual percentage rates (APR) are typical for our industry. A recent Missouri State Auditor’s Report revealed the average to be 200% to nearly 400%. Illinois approached 300%. Wisconsin averages 300%.

Here’s a link to The California Department of Business Oversight Report. It reveals 53% of title loans earned 70% – 99% APR’s and business increased 17% year over year!

How to Start Title Loan Biz

Click to Buy

So… how profitable is a title loan business?

What’s this mean to a car title loan company? You loan $1000 and earn $99/month in interest. Your borrower pays you nearly $600 in interest over 6 months. At the end of 6 months, your borrower still owes you the $1000 principal. Not bad!

In many states, Texas for example, typical fees on a $500 loan are 25% per month; $125 month interest only. Note that these are typical rates for auto title loan companies – sometimes referred to as “pink slip loans” having stores in states/provinces with fee caps. When operating in locales not having prescribed statutes you will experience even higher APR’s.

Additionally, it’s not uncommon for auto title loan companies to minimize their APR calculations by failing to compute them properly. This is not necessarily intentional. Many operators simply do not know how to calculate an APR correctly. This is not recommended. It can lead to serious problems, particularly after you become extremely successful. You will become a target  (More on this in our How to Start a Car Title Loan Manual).

How to start a car title loan business

Click to Invest Now!

Share