Auto Title Loan Pitfalls

Here at Barberton Junk Cars we provide a variety of services including damaged car removal, buying junk cars in Ohio and we issue sellers a free quote for an old car. If seeking out where to junk a car for vehicle scrap typically you will wind up at one of the scrap yards that buy cars. These places where to junk a car, simply allow you to sell an old car for cash and usually wrecked or damaged car removal is included. In many instances a vehicle owner may have a good running car and also an immediate need for cash. This combination of factors often precipitates the consideration of an auto title loan. These loans are fundamentally risky, expensive and typically used by consumers who are facing desperate situations.

Ms. Molly Young produced a story on September 7, 2015 titled ‘Sky-high interest rates tied to online title loans prompt lawsuit from Oregon regulators’ on oregonlive.com that presented some information as follows: “Jodi Arbak’s daughter needed a plane ticket to college and some extra cash to spend once she arrived. So Arbak searched online for a title loan. She filled out an application and sent in photos of her 2012 Kia Soul. Soon, she had $1,500. And Auto Loans LLC had a lien on her $12,000 car. She didn’t know Oregon regulators never licensed the lender or the triple-digit interest rates it charged. And yet, at least 250 other Oregonians got caught in the same trap: Pay sky-high installments or risk losing your car. Even if they kept up every month, many borrowers were pummeled by a final balloon payment that cost more than the original loan. Arbak says she never saw a contract spelling out those terms and within months, her Kia was gone.

Residents continue to be hamstrung by the financial strings often tied to online loans. The state hasn’t licensed a single online title lender, and only seven internet lenders overall. Many have no reason to apply, because their annualized interest rates soar beyond Oregon’s 36% ceiling. They just shell out cash to Oregonians anyway. Complaints flood in — Oregon’s top banking regulator has fielded more than 250 against unlicensed consumer lenders since 2010. Auto Loans and its connections are frequent fliers, named in 16 complaints. Washington issued a consumer advisory about a related firm last year, and Pennsylvania ordered the operations to cease and desist.

In August, the attorney general sued Auto Loans LLC and (3) affiliates. A Multnomah County judge then ordered the business to temporarily stop making or collecting on loans in Oregon. The state contends the unlicensed operation preyed on vulnerable people who may have never seen the contracts, including annual interest rates as high as 334%. Officials also told borrowers to stop paying the loans, which they have declared void under Oregon law.

Many online lenders cite ties to tribes that are not bound by state rules; others are based overseas & ignore U.S. regulations. Financial regulators insist the companies are required to follow state laws when they lend to residents. In June, lawmakers passed a bill that voids loans of $50,000 or less made by unlicensed firms. But Arbak said the next two payments went unpaid after she lost her job–they repossessed it. In February a man from Eugene showed up for her Kia. She and other borrowers said the company tracks cars through GPS devices and hires local firms to repossess vehicles.

Other Oregonians recounted similar experiences. A Portland man told state officials he needed money for the holidays & landed on Title Loan America, an Auto Loans LLC sister company. He said he read the original contract for his $1,500 loan, but not a second one that he says he was asked to sign, supposedly because of a spelling error. He believes the subsequent document included a much higher interest rate than he originally agreed to pay.

One problem regulators face is navigating the web of companies tied to the lender; most operate under generic names such as Liquidation LLC, Vehicle Liquidation LLC & Car Loan LLC. Some are based at a PO Box on the Cook Islands, a sparsely-populated country south of Tahiti. A physical operating address is difficult to find. Investigators searched DMV records and found the lender had registered 251 liens on Oregon vehicles. That number doesn’t capture how many cars they may have repossessed.” The complete story is available here.

We offer same-day wrecked and damaged car removal of junk cars in Ohio. Call (330) 732-JUNK for a quote for an old car and then you can decide where to junk a car. There are certainly many junk cars in Ohio. Some of the reasons for this are the often premature auto body deterioration that occurs from harsh NE Ohio winters and particularly from the vast usage of road salt that is used. The typical price quote for an old car right now varies between $150 and $250 in cash depending the age, condition and location of the scrap vehicle.