Pawnshops offer different loan alternatives, thanks to which they offer money quickly without requiring the client to guarantee financial solvency. The only requirement is that the client owns the car since this will be the guarantee of the operation. Of course, only vehicles that are not more than 10 years old and that are fully paid (although in some cases the latter is not an essential requirement) are accepted. Many pawnshops accept luxury cars more than 10 years old. The operation process is as follows.
Assessment
The first thing the Car Pawn Loan Atlanta Company does is appraise the vehicle and decide what percentage of its value the customer is going to get in exchange for the car. This valuation depends on each company, although most lend only between 40 and 50 percent of the value of the car. Instead of valuing the vehicle, the brand and model value for the current time is used as a reference in some cases. The time that the client will have to satisfy the debt, normally set at three months, is also negotiated.
Presentation of the documentation
If the client is satisfied with the amount to be received, the terms, the associated expenses and the commissions and interests, he must present the necessary documentation to formalize the operation.
- Number of days of loan repayment
- Technical sheet with ITV up to date
- Circulation permit
- Municipal tax for the current year
- Document proving ownership of the vehicle
- In addition, the client must deliver the blue books and sets of car keys.
Obtaining the loan
Once the documentation is delivered, the loan is delivered, which can be done in cash or by deposit in the client’s account. This last option is the most recommended.
Repayment of the loan
The client must repay the borrowed amount and interest within the agreed term. If he does not, he can request an extension. Nevertheless, if he finally does not pay, since the guarantee of this operation is the car itself, the pawnshop will keep it.
Is it advisable to pawn the car?
Consumer organizations recommend using car pawnshops only in cases of great need since the conditions that are contracted are usually very harsh for the client. As we indicated before, most offer between 40 and 50 percent of the value of the vehicle as credit, the interest charged is usually very high and not all vehicles are accepted.
Under these conditions, in a hypothetical case, a customer with a car valued at 24,000 dollars would receive a loan of 4,000 dollars, which must be paid within an average of 3 months at 20 percent interest. That is, after three months he will pay 4,800 dollars plus the costs of management and deposit of the vehicle. If the money is not collected within the stipulated period, the customer may be left without his vehicle, having received only 50 percent of its value for it. Thus, in cases of extreme necessity, a more sensible alternative must be considered, such as selling the car directly without having a pawnshop.
