THE BLOG

23
Feb

Car Title Loan Lenders Beware: Be Careful When Serving Active-Duty Service Members!

How to Start a Car Title Loan BusinessTitle loan lenders serving active-duty service members NO-NO!

“Department of Justice (DOJ) goes after car title loan lenders and city government for their repossession by tow truck vendors for towing, selling and auctioning active service member automobiles.”

Done right, a car title loan lender can make a lot of money. Done wrong, your title loan business can put you in a heap of pain! Want to avoid the pain? Learn “How to Start a Car Title Loan Business” here: Get Started.

Even city government can screw up when dealing with active-duty service members. A specific example? On June 22, 2015, Chief Petty Officer Hartzog’s military legal assistance attorney sent a letter to Pinky Tows that outlined the facts and applicable SCRA provisions and sought restitution of $22,889.95 for the value of the 1997 Chevrolet S-10 and for the tools and personal items that were stored in the motor vehicle.

The Service members Civil Relief Act (SCRA) requires a person, a car title loan company, city governments… having a lien on a vehicle owned by an active-duty service member to obtain a court order before enforcing a lien.  The DOJ’s complaint alleges that Honolulu and their tow truck general contractor violated the SCRA by towing vehicles belonging to three active-duty service members identified in a complaint and the subsequent disposition of these vehicles without court orders.  The settlement agreement states that a DOJ investigation – launched in response to information provided by military attorneys – revealed that between 2011 and 2016, the city of Honolulu auctioned 1,440 vehicles registered to individuals who identified themselves as service members on city forms during their motor vehicle registration process.

How to Start a Loan Business

How to Start a Title Loan Biz

NATURE OF THE ACTION
1. This action is brought by the United States to enforce the provisions of the Service members Civil Relief Act (“SCRA”), 50 U.S.C. §§ 3901-4043, against the City and County of Honolulu, Hawaii (hereinafter “Honolulu”) and P M Autoworks, Inc. d/b/a All Island Automotive Towing (hereinafter “All Island Towing”) (collectively “the Defendants”) for illegally auctioning, selling, or otherwise disposing of the motor vehicles and personal effects of active-duty service members.

2. The purpose of the SCRA is to provide service members with protections against certain civil proceedings that could adversely affect their legal rights while they are in military
service. One of those protections is the requirement that a person holding a lien on the property or effects of an active-duty service member obtain a court order prior to enforcing the lien. The
court may stay the proceedings for a period of time or adjust the obligations to preserve the interests of all parties.

3. Neither Honolulu nor its contracted towing company, All Island Towing, determines whether the motor vehicles they auction, sell, or otherwise dispose of are owned by active-duty service members.

4. By failing to obtain court orders before auctioning, selling, or otherwise disposing of the motor vehicles and personal effects of protected service members, the Defendants prevented service members from obtaining a court’s review of whether the lien sales should be delayed or adjusted to account for their military service.

5. Since January 1, 2011, the Defendants have auctioned, sold, or otherwise disposed of the motor vehicles of 1,440 individuals who had identified themselves as active-duty service members during the motor vehicle registration process. The Defendants auctioned, sold, or otherwise disposed of these vehicles to satisfy liens without obtaining court orders.

6. Prior to January 1, 2011, Honolulu and/or its contracted and subcontracted towing companies auctioned, sold, or otherwise disposed of the motor vehicles of other active-duty service members to satisfy liens without obtaining court orders.

Here’s the details on one of the 3 cases – the DOJ filed on. Chief Petty Officer Hartzog and his 1997 Chevrolet S-10.

Neither Honolulu nor its current contracted towing company, All Island Towing, determines whether the motor vehicles they auction, sell, or otherwise dispose of are owned by active-duty service members.

Honolulu’s Lien Sale of CPO Hartzog’s 1997 Chevrolet S-10

At all times relevant to this complaint, CPO Hartzog’s motor vehicle was registered in Hawaii. During the motor vehicle registration process, CPO Hartzog completed a non-resident driver form which identified him as a servicemember and exempted him from paying certain state and county motor vehicle weight taxes on that basis.

30. In October 2014, CPO Hartzog was aboard a U.S. Navy ship being transported to his temporary duty station in East Asia. Without his permission, his roommate drove his 1997 Chevrolet S-10 and was subsequently arrested. The motor vehicle was towed by Pinky Tows, a subcontractor of All Island Towing.

31. In early November 2014, CPO Hartzog learned via Facebook that his truck had been towed. On November 5, 2014, he executed a power of attorney onboard the naval ship, designating a fellow chief petty officer as his agent. On the same date, he scanned and emailed the executed power of attorney to his agent in Honolulu.

32. On or about November 11, 2014, the agent took the document to Pinky Tows in an attempt to retrieve CPO Hartzog’s motor vehicle and his personal effects. Pinky Tows refused to accept the power of attorney or release the motor vehicle. Pinky Tows refused to allow the agent to remove valuable tools and personal items from the trunk of the motor vehicle because the agent was not the motor vehicle’s legal owner.

On December 3, 2014, Honolulu attempted to auction the motor vehicle and its contents, but they did not sell. Honolulu released the motor vehicle to All Island Towing, and All Island Towing subsequently disposed of the motor vehicle and its contents. Neither Honolulu nor All Island Towing obtained a court order prior to putting CPO Hartzog’s motor vehicle up for auction or before disposing of the motor vehicle.

34. On February 5, 2015, CPO Hartzog returned from deployment.

35. On June 22, 2015, CPO Hartzog’s military legal assistance attorney sent a letter to Pinky Tows that outlined the facts and applicable SCRA provisions and sought restitution of $22,889.95 for the value of the 1997 Chevrolet S-10 and for the tools and personal items that were stored in the motor vehicle.

36. Pinky Tows responded by letter on July 16, 2015, stating that it had only towed and stored CPO Hartzog’s truck, and that the truck was put up for auction by Honolulu and was scrapped by All Island Towing.

37. On August 12, 2015, the military legal assistance attorney sent a similar demand letter to Honolulu. Honolulu did not respond.

38. The Department of Defense’s Defense Manpower Data Center (“DMDC”) website shows that CPO Hartzog was an active-duty service member when his motor vehicle was towed, put up for auction, and subsequently scrapped. The DMDC is the central source for identifying, authenticating, and providing information on Department of Defense personnel, including verifying  service members’ active duty status.

Here’s a link to the rest of this Case: https://www.justice.gov/

Learn the in’s and out’s of successfully launching, operating and profiting with a Car Title Loan Business: CLICK HERE TO GET STARTED!

How to Start a Loan Business

HOW TO START A TITLE LOAN BUSINESS

02
Feb

Example Bill of Sale for Car Title Loan

Looking for an “Example Bill of Sale for Car Title Loan” business?

A “bill of sale” is a state or province legal document that transfers ownership of a car, trailer, truck, RV, motorcycle… from one person to another.

It is used in situations where the previous owner retains possession of the vehicle.

bill of sale is an important part of any vehicle sale; however, it is not the only thing you’ll need to consider.

  • No car title loan is final until you complete a title transfer. Without this step finalized.
  • Many states require a state-specific bill of sale form. In this case, you must fill out the bill of sale form offered by the motor vehicle agency in your state. This list includes some states that require and provide a specific type of bill of sale form when you buy or sell a vehicle:

A bill of sale may be used in a wide variety of transactions: people can sell their goods, exchange them, give them as gifts or mortgage them to get a loan. They can only be used:

  • to transfer ownership of goods that people already own;
  • to transfer ownership of moveable tangible goods; and
  • by individuals and unincorporated businesses.
  • Here’s a link to an example “Bill of Sale:” Bill-of-Sale-Example-81-03
13
Aug

Title Loans: Profits and ROI for Entrepreneurs

How to start a loan business

How to start a loan business

Profits & ROI for a Car Title Loan Business 

An entrepreneur’s perspective.

Let’s begin with a real transaction. We have equity in California stores amongst other states. We do payday loans, car title lending, scrap gold buying and tax services. In one of our locations, a new customer walked-in requesting a title loan on his truck. We determined the “low-book” value of his collateral was $15,000. We loaned $3000 at 9% per month ($270/month) for 36 months with zero pre-payment penalty. If this customer chooses to, he’ll pay us a total of $9720 in fees AND will still owe us $3000 in principal.

[NOTE: If you’ve already invested in our “How to Start a Car Title Loan Company Manual,” simply whip it out and read pages 58 – 59. It discusses car title loan business key business metrics in detail.]

My point? You really don’t need to read any further to grasp the profit potential of a car title loan company.

You can read any daily newspaper and stories like the following will appear:

A single mom in Iowa received a $350 auto title loan for 14 days, paid only the interest portion 8 times with no portion applied to the principal, in total paying $977.

An auto mechanic in Tyler, Texas paid $1211 in interest and fees over 11 months; only having reduced the principal balance by $15.

Burdened by medical expenses, Amy Poormom applied for and received a $500 auto title loan secured by her 1995 Ford Taurus.  This was a loan for 30 days and specified a loan fee of $30 per $100 borrowed.  Amy renewed (paid only the interest/fee of $150) for 12 months.  At this point Amy had paid a total of $1800 in interest/fees while still owing a balance of $500.

Of course, the “mean” auto title loan company repossessed Amy’s car (which she needed for work) and sold it for $750 at an auction.  Now Amy can no longer get to work.  Amy lost her job.  Worry and stress put her in the hospital.  Now, the hospital is suing her for non-payment; she has no job so she has no insurance.

What is not mentioned or even considered is that Amy Poormom needed the initial car title loan because no one in her family was willing to provide her with the $500 she needed for tires and brakes on her car.  The auto title loan company actually enabled her to gain another 12 months to get her life back on track.  It could be said that had the auto title loan company not come to her aid and provided some hope for Amy, the ultimate outcome would have come earlier.  Perhaps the family should have performed an intervention to help her with her crack habit. 

Ok, if you’re reading this you may think we are getting carried away.  But these are real-life events. 

ENOUGH OF THIS!

Back to profits.

States and provinces having specific auto title loan statutes and fee structures typically prescribe 3% – 30% per month on the principal loaned; 25% being the average in the USA.  Thus, a $1500 loan for a 30 day title loan could yield total interest payments of $45 to $375 with no portion applied to the principal.  Thus, if after 6 months, the title loan consumer continues to “roll-over” this title loan they will have paid as much as $2250 in fees/interest.  The balance due on their car title loan would remain $1500.

$500.00 borrowed for a 30 day term will typically cost $125 including miscellaneous fees.  The actual range is roughly $75 to $190 depending on the state/province and the exact circumstances of the title loan borrower.

After you enter the car title loan business, you’ll be pleasantly surprised by the number of customers who will have a late model Lexus or Mercedes.  It’s amazing how many people receive settlements and use the proceeds to purchase a new luxury car.  Later they experience cash-flow problems and need your help; and they have the title to their car!

Even in a state like Florida where the statutes prescribe an interest rate of 30% per annum, it’s a simple matter to put $250,000 “on the street” in auto title loans.  This would yield a gross of $75,000/year versus a CD earning $2,500 (1% annually).

These car title loan clients may not be totally bereft, but they are in trouble and are willing to borrow money at interest rates dwarfing those of a conventional bank loan; ranging from 17 percent a month (204 percent APR) on $500 or less to 10%, 20%, 30%  percent a month  on more than $5,000.

“Your job is your credit” rings very true in our industry; the business of lending money on car titles.  We have a Texas operator having 300 people bringing him $40 per week.  That’s $12,000 per week!  If the car breaks down, he has it fixed and adds it to their car loan.

A great number of auto title loan lenders add on several fees to improve their ROI’s and provide incentives to their title loan clients to pay on time.  These include but are not limited to:

  • A $15 fee if a collection letter must be mailed to the title loan consumer
  • A $25 returned check fee
  • Late fees (5% is typical)
  • Should a collector be sent to their door, a $50 to $100 fee is imposed

Deficiency fees are collected should a sale of the vehicle yield less than the amount owed on their title loan.

Want to know more? Learn how to start a car title loan business. Invest in our “How to Start a Car Title Loan Business Manual” now. In 30 seconds you’ll receive a link to download it in Adobe Acrobat [PDF] and begin your journey. Click Here!

Title Loan Business

Title Loan Business

13
Jun

Start a Georgia Car Title Loan Business

Georgia Title Pawn & Title Loans

How to open a car title loan business in Georgia

Governments move links often. If you encounter any broken links, start your research here: http://dbf.georgia.gov/

If you follow the advice offered in our “Car Title Loan Manual,” you’ll get a title loan here as part of your research: http://www.titlemax.com/georgia-title-loans/

The state of Georgia refers to car title loans as title pawn transactions.

Georgia Vehicle Registration: http://dor.georgia.gov/vehicle-registration

Georgia Title Loan legislation specifically authorizes “title pawns” as a type of pawn transaction.

A Georgia pawn broker may:

  • Charge interest and charges of up to 25% of the principal amount for each 30 day period during the first 90 days of a title loan.
  • Transactions extended beyond 90 days may be charged for each 30 day period interest and pawnshop charges which together equal no more than 12.5% of the principal amount advanced with a minimum charge of $5.00 each 30 days.

Georgia lawmakers passed the current title pawn bill authorizing lenders to charge an annual percentage rate that amounts to as much as 300 percent.

A quote from the Georgia Department of Banking & Finance:

“Some consumers turn to pawnshops and title lenders when they are in need of emergency cash or a short-term loan. It should be noted that the Georgia Department does not regulate these types of businesses.

Depending on jurisdiction, city or county ordinances outline specific requirements for licensing and supervision of pawnshops in Georgia. Local police departments/public safety departments are typically responsible for supervision of pawnshops in their jurisdiction and often handle the licensing process as well.

One of the primary purposes behind handing supervision of the Georgia title loan industry over to law enforcement agencies is to allow them to review pawn data for stolen property.

Section 44-12-136 of the Official Code of Georgia Annotated (O.C.G.A.) provides for the supervision and licensing of pawnbrokers by municipalities.

Title Loan Business

Title Loan Business

Again, in Georgia, the interest rate car title loan companies are allowed to charge is capped by law at 25 percent monthly (300 percent annually) for the first three months and 12.5 percent monthly after that (150 percent annually). This means a combined maximum yearly interest rate of 187.5 percent.

In the case of title pawn, Georgia law [O.C.G.A. Section 44-12-138(b)(3)] requires the pawnbroker to provide title loan borrowers the following written statement when a borrower pawns their vehicle: “Failure to make your payment as described in this document can result in the loss of your motor vehicle. The pawnbroker can also charge you certain fees if he or she actually repossesses the vehicle.”

Again, the Georgia Department of Banking and Finance DOES NOT license or have any jurisdiction over car title loan lenders, pawnbrokers or pawn transactions.

09
Jun

Texas Payday Loan & Auto Title Loan Business

Texas Payday Loan & Auto Title Loan Business

Texas payday loans and Texas auto title lending can be very profitable IF you remember that the business of lending money to make money is really a COLLECTIONS BUSINESS!

As we stress in our “How to Start a Title Loan Business Manual” and in our stores and when performing consulting work with our clients, the collection process begins the moment the lender begins a conversation with the borrower.

The lender must “look” for key phrases, terminology, and triggers that set off alarm bells; this borrower will NOT pay me back as agreed! For details, read our Manual or opt in to our free Monthly Newsletter. [It’s over there on the right side of your screen.]

Texas Payday Loan & Auto Title Loan Business

Texas Payday Loan & Auto Title Loan Business

01
May

Can a Car Title Lender Repossess a Car After One Missed Payment?

What’s a Car Title Loan? When Can the Lender Repo it?

So, the question is, can you repossess the car, truck, boat, motorcycle, RV, boat… when your borrower has failed to make their timely payment to you?

Answer? It depends. You must check with your state or province department of banking, department of financial institutions… whatever the appropriate regulator is for your geographic area.

For example, in California where we have store-fronts and offer Inerner loans, we can repo the collateral after the first missed payment.

Here’s the California law from the California Department of Business Oversight website:

CAN A CALIFORNIA FINANCE LENDER REPOSSESS A VEHICLE AFTER ONE MISSED PAYMENT?

Title Loan Business

Title Loan Business

“The Finance Lenders Law does not prohibit a lender from repossessing a vehicle after a single missed payment. To determine whether the repossession of a vehicle is permissible under your loan, refer to the original loan/contract documents that you signed when the financing was obtained. In most cases, lenders are within their rights to repossess a vehicle when a payment is not made.”

What is a car title loan? Here’s the long-winded answer: What is a car title loan.

27
Apr

Car Title Loan Statistics & Profits in California

Car Title Loan Statistics Reported by State of California: 

  • Growth in auto title secured consumer loans slowed in 2015.
  • The number of such loans originated last year went up 9.5 percent, to 116,444 from 106,373 in 2014.
  • By comparison, the year-over year growth rate in the number of loans in 2014 was 16.2 percent.
  • The aggregate principal of auto title loans in 2015 increased 10.9 percent from 2014, to $423.5 million from $381.9 million.
  • That compared to a 14.1 percent growth rate in 2014.
  • In 2015, more than half of the loans valued at $2,500 to $4,999 carried annual percentage rates (APR) of 100 percent or higher.
  • Licensees originated 535,585 such loans, and 293,248 – or 54.7 percent – had APRs of 100 percent or higher.
  • This was the largest category of consumer loans, as measured by number originated.
  • Not sure: What is a Car Title Loan?

 

Last 10 Yeras Calif Car Title Lender Licenses

Last 10 Years of Calif Car Title Lender Licenses

And an analysis of the California title loan volume during the past 10 years:

Car Title Loan Volume
Average APR fees charged

Average APR for Car Title Loans

Access to the full Report is here: Calif Dept. of Business Oversight

21
Aug

Utah Car Title Loans: Laws

Utah Title Lending Registration Act Chapter 24

General Provisions 7-24-101 Title.

This chapter is known as the “Title Lending Registration Act.”

7-24-102 Definitions.
As used in this chapter:
(1) “Nationwide database” means the Nationwide Mortgage Licensing System and Registry,
authorized under 12 U.S.C. Sec. 5101 for federal licensing of mortgage loan originators.
(2) “Rollover” means the extension or renewal of the term of a title loan.
(3)
(a) “Title lender” means a person that extends a title loan.
(b) “Title lender” includes a person that:
(i) arranges a title loan on behalf of a title lender;
(ii) acts as an agent for a title lender; or
(iii) assists a title lender in the extension of a title loan.
(4)
(a) “Title loan” means a loan secured by the title to Continue Reading..

08
Mar

Virginia Car Title Loan Business Startup

Here’s the 2014 Virginia car title loan statistics as reported by the Virginia State Corporate Commission. 2014 is the latest available as of today.

Virginia average title loan principal is $1048.00.

There were just over 155,000 Virginia car title loans made.

Average number of Virginia car title loans per borrower was 1.2.

The average APR for Virginia car title loans was 222%.

There were 19,000+ Virginia title loans repossessed (12%. This is much higher than our title loan stores.)

Want to start a title loan business in your State? Begin here: “How to Start a Car Title Loan Business.”

 

Virginia-Title-Loan-Statistics-61-03

Virginia Auto Title Loans Report-61-10-VA State

22
Dec

Are Car Title Loan Businesses Profitable?

Profits & ROI: Lending $$ on Car Titles

Title loan business profits.

Before you invest any more time in considering a car title loan business start-up, let me explain how much MONEY you can make!

Let’s begin with a real transaction. We have equity in California stores. We offer payday loans, car title lending, scrap gold buying and tax services.

In one of our California title loan locations, a new customer walked-in requesting a title loan on his truck. We determined the “low-book” value of his collateral was $15,000. We loaned $3000 at 9% per month ($270/month) for 36 months with zero pre-payment penalty. If this customer chooses to, he’ll pay us a total of $9720 in fees AND will still owe us $3000 in loan principal.

What’s the worse case? Our borrower doesn’t pay us back the $3000. We call our repo guy and he picks up the truck. He delivers it to the auction. The auction company cleans it up and sells it for us. We get a check from the auction for $12,500. We add on our repo fees, auction fees, late fees… and send our truck owner the balance. All we did is pick up the phone!

The point?
You really don’t need to read any further to grasp the profit potential in the title loan industry.

If you’re interested, I delve DEEPLY into PROFITS in our “Title Loan Manual” here: http://www.AutomobilePawn.com

Title Loan Business

Title Loan Business

Once you get rockin & rollin, it’s not a huge leap to make 100+ title loans via one store or website.
100 title loans averaging $3000/ea = $300,000 “on the street.”
$300,000 X 9%/month = $27,000/month in gross fee income!

As you can see, deduct for 1.5 employees, rent, phones, software… AND YOU”RE MAKING SERIOUS MONEY!

You will read a daily newspaper somewhere and stories like these will appear:

A single mom, Amy Poormom in Iowa, received a $350 auto title loan for 14 days, paid only the interest portion 8 times with no portion applied to the principal, in total paying $977.

An auto mechanic in Tyler, Texas paid $1211 in interest and fees over 11 months; only having reduced the principal balance by $15.

Burdened by medical expenses, Amy Poormom applied for and received a $500 auto title loan secured by her 1995 Ford Taurus.  This was a loan for 30 days and specified a loan fee of $30 per $100 borrowed.  Amy renewed (paid only the interest/fee of $150) for 12 months.  At this point Amy had paid a total of $1800 in interest/fees while still owing a balance of $500.

Of course, the “mean” car title loan company repossessed Amy’s car (which she needed for work) and sold it for $750 at an auction.  Now Amy can no longer get to work.  Amy lost her job.  Worry and stress put her in the hospital.  Now, the hospital is suing her for non-payment; she has no job so she has no insurance.

What is not mentioned or even considered is that Amy Poormom needed the initial title loan because no one in her family was willing to provide her with the $500 she needed for tires and brakes on the car.  The auto title loan company actually enabled her to gain another 12 months to get her life back on track.  It could be said that had the auto title loan company not come to her aid and provided some hope for Amy, the ultimate outcome would have come earlier.  Perhaps the family should have performed an intervention to help her with her crack habit?

Ok, if you’re reading this you may think we are getting carried away. But these are real-life events.

ENOUGH OF THIS!  If you’re so inclined, make some serious cash and use your profits to give back to your community any way you see fit. (Note that Warren Buffet owns MANY mobile home parks. He makes a LOT of money with them. He takes a LOT of heat because of the way they are operated. Warren gives $$$ back…)

Back to title loan business profits.

States and provinces having specific auto title loan statutes and fee structures typically prescribe 3% – 30% per month on the principal loaned; 25% being the average in the USA.  Thus, a $1500 loan for a 30 day time period could yield total interest payments of $45 to $375 with no portion applied to the principal.  Thus, if after 6 months, the consumer continues to “roll-over” this loan they will have paid as much as $2250 in fees/interest.  The balance due would remain $1500!

$500.00 borrowed for a 30 day term will typically cost $125 including miscellaneous fees.  The actual range is roughly $75 to $190 depending on the state/province and the exact circumstances of the borrower.

After you enter the title loan business, you’ll be pleasantly surprised by the number of customers who will have a late model Lexus or Mercedes.  It’s amazing how many people receive settlements and use the proceeds to purchase a new luxury car.  Later they experience cash-flow problems and need your help.  And they have the car titles!

Even in a state like Florida where the title loan statutes prescribe an interest rate of 30% per annum, it’s a simple matter to put $250,000 “on the street” in auto title loans.  This would yield a gross of $75,000/year versus a CD earning $15,000. By the way, Florida title lenders are very creative. They add on road service fees, application fees, up-front loan matching fees… achieving SUBSTANTIAL ROI’s.

Title loan clients may not be totally bereft, but they are in trouble and are willing to borrow money at interest rates dwarfing those of a conventional bank loan; ranging from 17 percent a month (204 percent APR) on $500 or less to 10%, 20%, 30%  percent a month  on more than $5,000.

“Your job is your credit” rings very true in our industry.  We have a Texas title loan operator having 300 people bringing him $40 per week.  That’s $12,000 per week!  If the car breaks down, he has it fixed and adds it to their loan.

A great number of auto title loan lenders add on several fees to improve their ROI’s and provide incentives to their clients to pay on time.  These include but are not limited to:

* A $15 fee if a collection letter must be mailed to the consumer
* A $25 returned check fee Late fees (5% is typical)
* Should a collector be sent to their door, a $50 to $100 fee is imposed
* Deficiency fees are collected should a sale of the vehicle yields less than the amount owed.

Alright. If you found this interesting, PLEASE TELL ME: Jer@AutomobilePawn.com

And, if you’re ready to jump into the Title Loan Industry,
GO HERE and invest in our 300+ page “How to Start a Title Loan Business Manual.”

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