How Do Car Title Loans Work?

All loans carry risk if they are not repaid on time. One particularly troubling consequence of a car title loan, however, is if you default on your payment obligations: the lender can take your vehicle.

Before you consider getting a title loan, think about the potential potholes you will encounter if you use your vehicle as collateral to borrow money.

What is a title loan?


Definition of car title loan

An auto title loan is a short term loan that allows you to get a small amount of money in exchange for handing over the title of your vehicle to the lender. You will also have to pay significant fees to borrow money.


Let’s say you own a car worth $ 5,000 and you find yourself in an emergency that requires $ 1,000. A title loan allows you to borrow against your vehicle, so you can quickly get that $ 1,000. Just like a mortgage is against your home, a title loan uses your vehicle as collateral.

“One of the main pieces of information people need to understand about a title loan is that it uses your vehicle’s equity to secure the money you borrow,” says Bruce McClary, vice-president. president of communications at the National Foundation for Credit Counseling. .

In most cases, you must own your vehicle to be eligible for an auto title loan. The term “car” may appear in the name of the product, but these loans may also be available for motorcycles, boats and recreational vehicles.

While some lenders will offer loans if a car is still in repayment, most require the owner to hold title without any debt related to the vehicle. Consumers can typically borrow between 25 and 50 percent of the value of the car.

How does securities lending work?

Car title loans come in many forms. Some are lump sum loans, which means the borrower has to pay the full loan amount plus interest charges within a month or so. Installment loans, with similarly high APRs, can be repaid over three or six months, depending on the lender.

When applying for a car title loan, be prepared to show the lender clear title, proof of insurance, and photo ID. Some lenders ask for a second set of keys.

While securing a title loan can be easy, the convenience comes with significant costs and risks, according to Graciela Aponte-Diaz, director of federal campaigns at the Center for Responsible Lending.

“Some auto title lenders install a GPS device – dubbed a ‘kill switch’ – that can prevent the borrower’s car from starting, using this practice as a way to collect debt or facilitate foreclosure of the car,” explains Aponte-Diaz. . “In addition to being (the) primary form of transportation to work, to the doctor and elsewhere, a car is often a person’s biggest financial asset. The looming threat of losing your car is anxiety-provoking, to put it mildly.

Disadvantages of Securities Lending

The main disadvantages of title loans are a short repayment period, very high interest rates, and the potential loss of your car if you default on your payment.

“These are generally short-term loans with very tight repayment cycles,” says McClary. “If you can’t pay the loan back when it falls due, it gets carried over to another cycle with more fees. This creates a very difficult situation for people who are already struggling to repay. This is the exact definition of the debt cycle.

In addition to tight repayment terms, auto title loans have extremely high interest rates. Lenders often charge 25% each month in finance fees. On a $ 2,000 loan, you will pay an additional $ 500 in interest if the loan is paid off in 30 days. If you are behind on your payment and those interest charges add up, the loan can end up costing much more than the original sticker price.

Perhaps the biggest downside is losing your car. If you can’t pay it back, the lender can take your vehicle back. In 2016, a study by the Consumer Financial Protection Bureau found that 20 percent of those who take out title loans have their vehicles foreclosed.

Alternatives to securities lending

With such drawbacks, McClary recommends reaching out to traditional banks and credit unions to explore other, less expensive lending options.

“A lot of people might avoid traditional lenders because of assumptions about their credit,” he says. “It’s the most dangerous thing you can do. You are depriving yourself of money that you could potentially save.

Even if you don’t have a bank account, have a lower credit rating, or have struggled with bad financial decisions in the past, it’s worth investigating all of your loan alternatives. “It’s interesting how flexible these traditional lenders can be,” says McClary. “There are a lot of credit unions that are willing to work with unbanked customers. “

McClary says he rarely advises increasing credit card debt, but stresses it’s a better option than a title loan. “If you have unused credit on a credit card, you can count on it to cover your costs,” he says. “In most cases, the interest rate on your credit card will be much lower than what you get on a car title loan. And this route prevents you from potentially losing your vehicle.

At the end of the line

If you decide that a car title loan is your only option, make sure you understand the terms of the loan. Securities lenders are required to show them to you in writing before signing, and federal law requires them to be honest and upfront about the total cost of the loan. And remember, these costs are probably not worth the risk.

“Car title loans often lead people to get into debt and lose their cars,” says Aponte-Diaz. “Car title lenders often make people worse off than they were before they took out the loan.”

Ather electric scooter price will be 15,000 rupees lower in Delhi

Ather Energy sells 450 and 450X scooters in Bangalore and Chennai – They will be launched in many other cities including Delhi this year

Ather 450X launched in January 2020. In fact, sales for that month were the brand’s highest for the year so far, breaking the 800-unit mark. While sales resumed in May 2020 after a partial foreclosure in March and a full foreclosure in April, sales in May were weak. MoM sales for June and July are about to pick up. July 2020 sales were reported at less than 200 units.

To boost sales, Ather will launch its electric scooter in many new cities, including Delhi. Now, with a clear overview of Delhi EV policy, Ather’s intention to start operations in Delhi is getting a boost. Essentially, the benefits offered by the state will reduce the purchase price on the road.

“Ather will begin deliveries of our flagship Ather 450X scooter in the coming weeks in Delhi. State policy is effectively reducing the on-road cost of our scooters by almost Rs 15,000. We look forward to being in the nation’s capital very soon, ”said Tarun Mehta, CEO of Ather Energy.

Delhi EV Policy 2020

While Delhi sees a large number of electric three-rickshaws in daily service, especially when it comes to last mile connectivity, the adaptation of electric vehicles to personal mobility vehicles has been lackluster. Essentially, Delhi’s electric vehicle policy seeks to incentivize purchases through subsidies and waivers, reduce pollution, and develop infrastructure and activities around strengthening the adaptation of electric vehicles to generate revenue. jobs. Road tax and registration fees are waived.

Electric scooter Ather 450X

The Delhi government has developed a time-bound and targeted electric vehicle policy. Above all, it is designed to stimulate buying incentives. The state offered an additional subsidy to make electric vehicles more accessible. The policy describes the development of the charging infrastructure, the types of electric vehicles transported, as well as the consideration of the policy for the disposal of old ECE vehicles. There is not yet a set amount for what the payment will be for an old ICE vehicle and whether or not this will be beneficial for all future vehicle purchases, or for EVs alone.

As it stands, the financial incentives for electric two-wheelers, electric rickshaws and electric freight vehicles will amount to Rs 30,000. The benefit is Rs 1,50,000. for electric cars. The incentives offered through the Delhi EV policy will be applicable in addition to the incentives for electric vehicles under central government.

The Delhi EV policy in its current form is designed for an initial period of three years. Progress will be monitored through regular reviews. A state fund for electric vehicles (EVs) will cover policy-related expenses. An electric vehicle board chaired by the state transport minister will oversee the implementation of the policy. The policy describes the sale of a total of 5 lakh of new electric vehicles over a period of 5 years.

The development of infrastructures provides for the installation of 200 charging stations per year, with an electric charging station every 3 kms. While it is too early to predict the success of the policy, on paper the now progressive policy is expected to benefit a wide range of potential electric vehicle users. Delhi EV policy does not benefit lithium battery electric scooters with speeds up to 25 km / h.


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Griffith, Zwick: Triple-digit interest rate securities lending more dangerous during COVID-19 pandemic

By Kelly Griffith and Cynthia Zwick

As working Arizona families struggle to maintain jobs and reliable sources of income in a historically dire economy, the last thing they need is a predatory debt trap making matters worse.

A securities lender recently claimed his business was essential: charging triple-digit interest on loans that trap people in debt at the risk of losing the vehicles they depend on. It is an insult to families who are most exposed to the health impact of COVID-19 as well as financial devastation.

Arizona voters sent a clear message in 2008 that payday lenders were unwelcome to continue charging vulnerable consumers outrageous interest rates of up to 391%. Voters rejected a payday industry-sponsored voting measure by a 3 to 2 margin, which ultimately led the state to cap payday loan interest rates at 36%.

And a recent poll indicates that Arizona voters, regardless of their political party, strongly oppose these predatory practices. Seventy percent of Arizona voters support a 36% interest rate cap. Eight in 10 Americans (81%) support a ban on all high interest loans during the coronavirus crisis, with more than half (56%) doing so strongly.

Even though the recent increase in COVID-19 cases demonstrates that the virus knows no bounds on who it affects, it has become evident that this virus has a disproportionate impact on communities of color. The same goes for predatory loans. In states where payday loans are legal, stores are heavily concentrated in black and Latino communities, stripping precious wealth from places that are already in trouble.

Auto title lending stores follow the same pattern. A 2018 car title lending location mapping by Tucson’s Center for Economic Integrity found that high-cost lenders are much more likely to be located in low-income neighborhoods of color. In Arizona alone, these predatory lenders drain $ 255 million a year from our most vulnerable neighbors.

In the event of a pandemic, defending this legalized usurious loan exposes people of color to economic catastrophe on top of the worst health problems they already face.

As a society, we have a responsibility to be aware of how devastating securities lending can be for the individuals, families and communities of color who are most often the targets of unscrupulous lenders. Aside from television commercials and billboards, a small, triple-digit interest rate loan does not offer relief from financial hardship. These types of loans take a precarious financial situation and turn it into an absolute disaster.

Auto title lenders continue to file collection cases against their borrowers despite the emergency declared by Governor Ducey on March 11. In a single day last week (July 15), Checkmate Express filed 15 new cases against borrowers in the Maricopa County Court of Justice, indicating that these loans are unaffordable and borrowers are in trouble. The effects of small, high-cost loans are creating additional damage and widening health and wealth gaps, especially now in times of a pandemic.

Securities loans are predatory and designed in such a way that the borrower is trapped in a never-ending cycle of debt. The Consumer Financial Protection Bureau has found that one in five borrowers have repossessed their vehicles and that two-thirds of lender volume comes from borrowers stranded in seven or more loans.

The majority of securities lending companies in Arizona are regional or national chains, not family businesses. At least 18 approved securities lenders are headquartered outside of Arizona, representing 25% of businesses and 59% of approved sites offering loans in Arizona.

There are at least six licensed companies out of state that offer loans online without providing physical locations in Arizona, with the entire transaction handled electronically. In some cases, consumers apply for loans online, submit documents, and then take out loans with local agents.

Now more than ever, consumers need to be protected from these largely out-of-state financial predators, so that legitimate small lenders who meet Arizona’s 36% APR small consumer loan limit or less can arise in a fair and equitable market. .

Individuals and families do not need to access predatory products. What we need is for the state to deal with the issue of unemployment insurance, access to food, medical care, broadband, telehealth and other issues. urgent economic issues. And we need to strengthen consumer protections to guard against exploitation, including repealing the legal exclusion that allows triple-digit interest rate car title loans. This is the role of government during a crisis.

Arizonans are resourceful, resilient, and able to navigate just about anything. Loan programs that prey on people when they are most vulnerable on the pretext of being useful during a pandemic is a bit like a wolf parading in sheep’s clothing. Only those who profit from it agree with the trick. The rest of Arizona voters see it for what it is — wear and tear.

Editor’s Note: Kelly Griffith is the Executive Director of the Arizona Center for Economic Integrity and Cynthia Zwick is the Executive Director of Wildfire.

Piaggio India announces festive offers for Aprilia and Vespa scooter range


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Ganesh Chaturthi offer is available in select states including Maharashtra, Gujarat, Rajasthan and MP

Piaggio India has rolled out festive offers for the celebration of Ganesh Chaturthi for its range of Aprilia and Vespa scooters. Festive offerings are available in some states, however, including Maharashtra, Gujarat, Madhya Pradesh, and Rajasthan. As part of the special offer, customers will have the chance to win up to 20,000 in cashback with the purchase of the Vespa SXL and VXL 125 and 150 models, as well as the Aprilia SR 160, SR 125 and Storm 125 scooters The offer, however, is only available at Company dealers in certain states and will not apply to customers who book scooters online.

Read also: 2020 Aprilia Storm 125 Front Disc Brake and Vespa VXL, SXL Facelifts launched in India

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The updated BS6 compliant Vespa 2020 range was introduced earlier this year with updated engines and LED headlights with DRL

Ganesh Chaturthi kicks off the holiday season in India, which is considered to be one of the best times to buy a vehicle. The offer is only available this month and ends August 31, 2020. With this announcement, Piaggio becomes the first two-wheeler to announce offers for the holiday season and will help dealers recover. losses accumulated in recent months. Meanwhile, to those who choose to buy the scooters online, Piaggio is already offering 2000 benefits across its range.

Aprilia and Vespa scooters conforming to the BS6 standard were introduced in India last month. The 2020 Vespa VXL and SXL 125 and 150 BS6 come with a new LED headlight with integrated DRL, a USB mobile charging port and starter light. The retro Italian style has been carried over to the models making it a distinctive buy in the segment. The Vespa range starts at ₹ 1.10 lakh (ex-showroom, Pune).

Read also: Aprilia SXR 160 maxi-scooter unveiled at 2020 auto show

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The 2020 Aprilia Storm 125 with front disc brake and digital instrument console was announced last month

On the other hand, the Aprilia Storm 125 is the latest addition to the lineup and has been upgraded with a front disc brake and digital instrument console, and is priced at 91,321. This is the drum brake version, although it is the most affordable offering here priced at 85,431. The Aprilia SR 160 is the most expensive of the range at ₹ 1.12 lakh (all prices, ex-Pune showroom). The SR 160 also gets a larger 160cc BS6-compliant engine that produces 10.8hp and 11.6Nm of maximum torque.

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Piaggio India will soon add the Aprilia SXR 160 maxi-scooter to its range. The model was unveiled at Auto Expo 2020 in February and was initially scheduled to go on sale in the third quarter of the calendar year. However, with the COVID-19 crisis, the launch could be postponed for a few weeks. The manufacturer has yet to announce a change in the launch schedule for the next model. carandbike has contacted Piaggio for more details and will update this space as we receive a response.

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Ampere Magnus Pro electric scooter price Rs 50k on road

Industry’s first battery subscription plan launched by Ampere electric scooter in India

It was only recently that Hero Electric announced its association with Autovert for the introduction of subscription plans. Today, Ampere Electric Launches announces a battery subscription plan at a starting price of Rs 1,990 in partnership with Autovert Technologies.

The collaboration offers a battery subscription plan through a platform supported by IOT. The plan makes electric scooters even more affordable. In its start-up phase, the plan is presented with selected dealers in Bangalore and will be available in other cities in the next phase of expansion.

Advantages

A proposed battery subscription plan reduces the cost of acquiring the vehicle while being an alternative choice for buyers to get more than one finance option. Customers can choose Magnus Pro electric scooter for the least amount of money Rs. 49,990 on the road when selecting a monthly battery subscription of Rs. 1,990. For those who do not want to opt for the subscription plan, will have to ex-showroom price Rs. 73,990.

Magnus Pro specifications

Plan helps manage battery life cycle as well as benefits including 5 year extended warranty, full vehicle insurance, 24 month full vehicle service and maintenance, attractive upgrade options , replacement battery discounts, etc.

Full vehicle subscription plans are available for the Magnus Pro and Zeal models, from Rs. 2,777 per month. With now and various subscription finance plans, the Ampere electric scooter buying process is designed to be accessible to interested buyers. Ease of ownership makes it easy to upgrade to another Ampere scooter after the fixed subscription term has ended.

Electric thrust

The rough guideline is to see 30% of car sales covered by electric mobility by 2030. To achieve the goal, the need is not only to introduce updated electric vehicles, but to ensure a accessible funding that promotes faster adoption of electric vehicles in the country. Ampere electric scooters are sold in 220 licensed showrooms in India. with a value proposition of 90 percent savings over conventional scooters. The automaker claims that every Ampere electric scooter sold is equivalent to plant 12 trees.

Although the purchase of mainstream two-wheelers is not as dependent on financing as the purchase of large tickets, the introduction of easy EMI offers and subscription plans helps ease the financial burden to a great extent. . The easy upgrade options make these purchases akin to durable gadget purchases for consumers.

P Sanjeev, COO, Ampere Vehicles said, “We are pleased to partner with Autovert Technologies to present this unique battery subscription plan. With this association with special Ampere Freedom offers, we aim to make Ampere vehicles more affordable and accessible to the consumer.

Speaking on this announcement, Vinay Sharma, Co-founder and CTO from Autovert said. “The Battery subscription is possible, given the modular nature of the EV, which lends itself to decoupling the battery from the vehicle and the specific services offered around its life cycle. The EV ecosystem demands an alternative ownership model to drive faster adoption among an emerging customer base and we are happy to be at the forefront of this with our products and partners like Ampere to bring it to market.


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