How to protect yourself when buying a used car
Buying used cars has always been a risk. Here’s what you need to know to protect yourself through the process.
Nicole Schaub, The Republic | azcentral.com
Signature collectors are beginning to roll out across Arizona in an effort to curb a type of high-interest lending in the state.
About 20 community groups on Tuesday launched a campaign to slam a measure that would cut auto-title loans that carry high interest rates and, critics say, trap borrowers in a cycle of debt.
The year-long Arizona Fair Lending Act effort aims to garner more than 237,000 signatures to place the measure on the November 2020 ballot. This comes 11 years after Arizonans defeated Proposition 200, which would have extended the payday loans indefinitely. Enabling legislation expired two years later, ending payday loans here.
“We thought we had taken care of (predatory lending) in 2008,” said State Senator Lela Alston, a Democrat from Phoenix who spoke at the launch rally in front of a lending store in LoanMax securities on 15th Avenue and McDowell Road in his neighborhood.
“But these squints have found a loophole in self-title loans,” she said.
Loans linked to the value of vehicles
Auto-title loans allow vehicle owners to borrow against the equity in their cars and trucks, using the titles of their vehicles. Critics say the loans charge annualized interest of up to 204%. The Arizona Fair Lending Act would not ban lending but would cap interest at 36%, ban lump sum payments and restrict other practices.
“I know a lot of friends and family members who have used these loans,” said Cymone Bolding, president of the Arizonans for Fair Lending coalition. One in five people who borrow against the value of their car or truck end up defaulting and losing their vehicle, she said.
Arizona residents pay more than $250 million in interest on loans each year, according to research by the Center for Responsible Lending.
“The job is not done,” said Lee Lange of the Southwest Veterans Chamber of Commerce. “We still have predatory lending in the state.”
Active duty military personnel are protected from paying more than 36% annualized interest on loans, but the guarantees do not apply to veterans and family members, he said.
An Arizona securities lending group did not immediately respond to a request for comment for this article.
Coalition of Low Income People
Groups supporting the signature collection campaign include the Military Officers Association, the Teamsters, Living United for Change in Arizona or LUCHA, the St. Vincent de Paul Society of Tucson, the Center for Responsible Lending, the Southwest Fair Housing Council and the NAACP.
Groups must collect at least 237,645 valid signatures by early July 2020 to qualify the measure for balloting later in the year. Volunteers and paid signature collectors are used in this effort.
Contact the reporter at [email protected] or 602-444-8616.