THE BLOG

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.

30
Apr

Marketing Idea for Installment, Title, Payday Loan Companies

Here’s a sample marketing piece for lenders offering car title, installment, payday loan… lenders.

This loan marketing idea is appropriate for direct mail, , door hangars, coupons… (add a Spanish Version to the reverse side).

Note that there is no mention of fees. Thus, we are not setting off “time bombs” that require us to add various annual percentage rates APR scenarios! This is a critical strategy and one we discuss thoroughly in our “How to Start a Car Title Loan Business Manual.”

Marketing Idea for Personal Loans, Car Title Loans, Payday Loans...

Marketing Idea for Personal Loans, Car Title Loans, Payday Loans…

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

13
Mar

Texas Car Title Loan Business Profits

How to Start a Texas Car Title Loan Business

You want to learn how to start a car title loan business? Read on…

According to The Texas Star Telegram, the typical Texas household is $40,000 in debt. They don’t make it clear whether this includes all Texas home loan mortgage debt; stupid.

The one thing that is clear is that Texas car title loan borrowers paid $360,000,000 in car title loan fees and interest last year. [Note: That’s an increase of $52,000,000 from the previous year. Car title loan lending is good!] This information was disclosed by the OCCC; the Texas regulatory agency for car title loan and payday loan stores and internet lenders.

Why would Texans spend this kind of money on car title loans? Because there is no where else to turn to in times of financial duress. Many Texans, like residents of California, Georgia, Arizona, Louisiana… would rather borrow from a car title loan lender for a few months than beg for help from their employer, family or friends. Why?

  • Car title loans are quick and easy
  • To qualify, you need to prove you can pay back the money and you have a car, RV, motorcycle… with a clear title. That means, no lien holder.
  • That’s right! Cars, RV’s, motorcycles, boats… all possible collateral for a title loan
  • Car title loan transactions are private
Title Loan Business

Title Loan Business

Critics of car title loan lenders are everywhere. Of course, they rarely experience “hard times” since the majority of these folks work for the government or a so-called consumer protection agency. A great example of this is the Consumers for Irresponsible Lending. [Just kidding; it’s the CRL.]

On the other hand, many consumers for car title loans work for the U.S. Post Office, the Department of Motor Vehicles, local hospitals, etc.

And of course, we have our “outlier’s.” Those consumers and lenders who push everything to the limit and place all financial service products to the point of over-regulaion! Not a day goes by that you don’t read some horror story about a poor, mistreated borrower whose car is repossessed or a car title lender who simply goes over the line of human decency because of greed.

As operators and consultants in the car title loan industry, we can report that the actual number of vehicles we repossessed are less than 3 in 100 funded title loans. In those few circumstances, we called, sent several text messages and letters to the borrowers in an attempt to get them to talk to us. Failing these measures, we simply picked up the phone, called our friendly repossessor and reported the vehicle plate and vehicle identification number to them. Within the week, the license plate scanner [LPS] company got a “hit” and our repossessor picked up the car having the title loan in a Wal-Mart parking lot.

Our car title loan repossessor delivered the vehicle to the Anaheim, Calif Manheim auto auction. There, the vehicle was reconditioned and “run” through the car auction. A week later we received our check from the auction house. We deducted the fees, interest, late charges and storage costs from the amount we received from the auction and sent the balance to our car title loan borrower’s last known address. [Note: This check was cashed :-)]

Car title loan lenders DO NOT WANT YOUR CAR! We just want our money. The fees are clearly explained AND posted on our websites and in the case of store-fronts, on the interior walls of the store.

Here’s an example of the fees we charge for a car title loan:

  • Vehicle “low book value” is $8000.
  • Borrower wanted $3000 for 30 days.
  • We charged her $180 in fees plus a $35 DMV fee.
  • That’s it!
  • Yeah, sure. Extrapolated over 365 days that’s 180%+ APR. So… if the borrower doesn’t like it, no one is forcing her to borrow the cash. Try your local bank. It would cost them $500+ just to do the paper work AND they will not offer these types of loans.

Is this loan predatory? We don’t think so. But it’s a bit like pornography. I can’t tell you for sure but I know it when I see it. In Texas, California, Georgia, Arizona… it’s legal. And for MANY Texan’s, this car title loan appears to be reasonable.

Start your own car title loan business. Get our “How to Start a Car Title Loan Business Manual” now; delivered immediately into your email inbox.

Click HERE to get started. Buy Now.

26
Feb

Car Title Loan Marketing Ideas

Marketing Ideas. By the guys who wrote the book on starting a payday loan, installment and  title loan business.

What’s a payday, installment, title loan lender to do? How do you get more customers? Google? Facebook? Instagram? Pinterest? Blogs, Direct mail? Yellow Pages Online? Buy leads? Billboards? What REALLY works? Acheiving success in increasing your loan portfolio size is a Pain in the ASS! A SLOW, long-term process.

It’s the simple stuff that works!

For our loan stores, we do use Google PPC and Bing but VERY localized (zip codes, city, county…) because the general PDL phrases are simply too expensive and poorly convert. Also, the lead gen companies have the time/expertise to FOCUS on this.

Storefront lenders must have a website that looks great on a phone! THIS IS ABSOLUTELY NECESSARY TODAY! 70% of the traffic coming to our websites are from a customer on their smart phone. We’re not trying to get apps completed on the smart phone but it does happen occasionally. Our #1 goal is to provide a customer with store directions via Google Maps, consumer visits and inbound phone calls with a formal appointment setup and then a call back to the customer before (reminders) and after the appointment (feedback). ALWAYS BE ASKING THE POTENTIAL CUSTOMER FOR THE APPOINTMENT!

Marketing? Our stores primarily do a lot of:

  • Local direct mail
  • Door hangars
  • Car wraps
  • Answer the damn phone! And do it right!! “How did you hear about us?”  [Understaffed? After hours?Use the experts at Centrinex discussed on a previous Post.]
  • Sign spinners
  • Community outreach
  • Billboards
  • Bandit signs [Yeah sure, check your city code enforcement. Or just do it and ask for forgiveness.]
  • Referral programs with businesses that service our demographic and need to be made aware of how we can help the merchant make more money. I’m referring to lawyers, bail bondsman, mechanics, Aamco transmission, brake shops, tire and rim companies, other PDL/title loan stores that employ different loan criteria or don’t service the same loan areas we do, tax preparers… GET CREATIVE!

WE ARE FOCUSED on determining who provided the referral and to pay them for it SOON IN CASH!! This makes a HUGE difference in regularity, quality and quantity of referrals! Of course, referrals from existing customers are treated with the same diligence and rewards. (And they are probably the most valuable leads we can get!) Your loan management software can be a BIG HELP with this process! [Does YOUR LMS offer many features enabling this “tagging” or are they weak? Do you even know?  This feature is a MUST today! Want to know which software companies we like and why? Most are TERRIBLE! Click Here]

Car Title Loan Advertising IdeaI used to own some Enterprise franchises. Rain or shine, a pretty girl or handsome face showed up at body shops – one of our target markets – REGULARLY with donuts, biz cards, pens, … THIS WORKS! Over and over again. Week in and week out! You must be manic about getting out from behind your desk and visiting these merchants in the field! Develop a script to briefly describe your business, why it’s good for the merchant and for the merchant’s customer. Then MAKE SURE you’re company does not do ANYTHING to make this merchant’s life more difficult because of your PDL/Title/Installment company’s actions!

I’ve ALWAYS thought the owner of the PDL/TITLE/INSTALLMENT store should personally do this at least one day every month! The owner has to get out in the field. Visit these potential referral businesses! Ask open ended questions! How is the business owner doing? How’s business? What are her/his challenges today? How can my business help this merchant? What’s working for them to increase THEIR sales revenue? What isn’t? Can we stay in touch? Additionally, assign employees to visit these merchants as well – every week on a formal schedule. Some of your employees will embrace this. Others will rebel. Role playing BEFORE in practice sessions with your Team will help prepare them for this. With time and effort, they will get better and yield referrals. CONSISTENCY is crucial!

Conduct a formal review of these visits immediately after returning from these field visits! Develop a check list and comments section. Who did your Team meet with? Their role? What was said? Outcome? Follow-up? Measure results.

Pick up a dozen donuts and just do it! Weekly!! No excuses!!! It’s about sales!!!! Document this strategy; hopefully with your loan management software!!!!! Repeat. Rinse. Do it again.

For most of us this is HARD! What do you say to the merchant? What’s your opening line? What if the merchant is busy? “I’m here to help us both make more money without burdening you with more hassles!” And don’t overlook any of the merchant’s employees who are present. You tell a Bail Bondsman’s office personnel that there’s cash available for referrals, THEY WILL SEND YOU CUSTOMERS! We have a car tire rim installer at a local tire/rim company who sends us 3-5 new clients every month. We have a stereo installer at a car stereo joint that sends us 2 – 6 new borowers every month! Susan, a car title lender in Los Angeles is using an inflatable character in front of her store to drum-up more business. This is working for her! People even have their pictures taken with it and post them on Facebook and Instagram. [If she picks up just one new customer a month with this approach, how much $$ in revenue will she earn over the life-time of this borrower? $1000? $5,000? $10,000? More?And from this borrower’s friends and family – referrals?]

You  know none of this is rocket science! Just good old Guerilla Marketing with a manic obsession!
Jer – Trihouse 702-208-6736 Comments? Questions?  Jer@TrihouseConsulting.com Share what’s working for you!!

21
Sep

Arizona Car Title Loan Lenders in CFPB Trouble

Title Loan Lenders Failed to Disclose APR’s

For car title loan lenders, it’s always been a “best practice” to fully disclose APR’s. It’s not enough to simply advertise car title loan rates! Title loan lenders MUST fully disclose – in layman’s terms – corresponding Annual Percentage Rates [APR].

This is nothing new! TILA has played a dominant role in lending since the beginning of time.

There has not been a single OLA, CFSA, FISCA or state industry conference that failed to address TILA issues since 1998 when I attended my first conference. One lawyer after another has conducted “workshops” imploring all lenders to pay attention to this issue.

So suddenly the CFPB makes an announcement that 5 Arizona car title loan lenders failed to disclose their loan APR’s on their website?

SIMPLY ASTOUNDING! We’re talking about these failures having occurred from July, 2016 onward! CRAZY! Who are these fools?

  • Auto Cash Leasing [founded 1999]
  • Interstate Lending [2005]
  • Oasis Title Loans [2013]
  • Phoenix Title Loans [2013]
  • Presto Auto Loans [2002]

The CFPB accuses these car title loan lenders of advertising a monthly interest rate but failed to state the annual APR.Annother lender is accused of forcing title loan borrowers to multiply the lenders advertised interest rate by 12! [Are you kidding me??]

Start Car Title Loan BusinessTo be fair, these 5 Arizona title loan lenders have not yet been found guilty in a court of law. Nor have they reached a settlement.

But you gotta know even the bureaucrats at the CFPB know how to take a screen shot of a title lender’s website. At least the interns do. Unless they’re kept busy doing other things.

Man, this is “Outer Limits” stuff. Too young to remember the TV show, “Outer Limits?” Too bad… great show!

06
Sep

Typical Car Title Loan Business Profits

Beginning car title loan lenders often ask about typical title loan borrower repayment schedules. Based on over 30,000 title loans over the past 3 years, here’s the average breakdown. Of course, if you’ve been a title loan lender for a while, your car title loan software should reveal your actual statistics.
Car Title Loan Business Statistics Basically, car title loan borrowers repayment schedules breakdown like this:

  • 3 borrowers in 10 pay off their title loan in full within 30 days
  • 1 borower in 10 will renew their title loan 1 time before paying off their loan in full
  • 1.5 borrowers in 10 will renew their car title loan 2 to 4 times before paying off their title loan in full
  • 4.5 title loan borrowers will renew their car title loan 5 or more times or will NEVER pay off their loan.

Needless to say, the title loan business can be very profitable.

Add other revenue streams [Insurance, tax preparation, DMV services…] to your product offerings and you can make some serious MONEY!

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..

11
Aug

Car Title Loan Checklist

When you’re running a car title loan business it’s critical to use a “Car Title Loan Valuation Checklist” to systematically place a value on the car title BEFORE you fund the title loan.

Title loan valuation checklists don’t have to be complicated. Just the basics in addition to a few pictures.

Title loan pictures should include the “Vehicle Identification Number” [VIN], the mileage and various angles of the car. [LF Front, RT Front, Rear, Front, License Plates…]

Car Title Loan Collateral Valuation Checklist

Car Title Loan Collateral Valuation Checklist

If you’d like a version of this “Car Title Loan Collateral Evaluation Checklist,” just email us at Team@AutomobilePawn.com . For a step-by-step guide to starting or improving your own title loan business go here: “Title Loan Startup Manual.”

Once you have completed this checklist, we’ll show you how to determine the maximum LTV – loan to value – to offer your customer. There are several free tools…Vehicle-collateral-title-loan-checklist-V4-lrg

 

23
Jul

Title Loans on Mobile Homes

Can a car title loan lender make a title loan on a mobile home?

Here’s an interesting Mississippi court case that provides specific insight as to whether a title loan company can provide loans on mobile homes. From the Case:

title loan on mobile home

Title loan on mobile home

“Based on the Debtor’s testimony, the Court finds that Laird led her to believe she was entering into a $2,500.00 title loan with Franklin Check Service. Indeed, Laird admitted at Trial that he initially discussed a $2,500.00 title loan with the Debtor. From his conversation with the Banking Department, Laird knew that Franklin Check Service could lose its title loan license if it granted a title loan on a mobile home and he also knew that he could not grant the Debtor a title loan himself, so he transformed the title loan transaction to a purported sale to circumvent Mississippi law.[12] It was reasonable for the Debtor to believe that she was agreeing to a titleloan with Franklin Check Service because her conversations with Laird and Delozier took place at its office, Laird was its sole owner, and Delozier was its sole employee. Also, providing Laird with the Certificate of Title was just as consistent with a titleloan as with a sale.[13] More significantly, the Court does not believe that the Debtor would have agreed to sell her mobile home for $2,500.00 when she had purchased it only five (5) months earlier for $8,700.00, had made repairs to the interior, and had no other place to live. Indeed, the $2,500.00 purchase price paid by Laird’s Body Shop is less than thirty percent (30%) of the amount the Debtor paid for the mobile home.[14] In comparison, thirty percent (30%) is within the typical percentage range that a title lender will loan. Taming Title Loans, 101 VA. L. REV. 1753, 1756-57 (2015).”

Here’s a link to the facts, the view of the Mississippi Banking Department and the ultimate disposition of this case:

Title Loans on Mobile Homes Link

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