Car dealerships — fertile ground for ID thieves

How common is identity theft at auto dealerships?  According to a report in Automotive News, “Dealerships are targets for identity thieves — those working from both the inside and outside.” *  The report quotes Dave Robertson, executive director of the Association of Finance and Insurance Professionals:

“It’s still a major problem, but it’s not growing as fast.”

The report also quotes Maryann McKessy, Chief of the Fraud and Identity Theft Bureau of the Maricopa County Attorney’s Office, regarding auto dealerships:

“I hate to say it, but it’s a pretty common ground where information is breached.”

The FTC has issued “Red Flag” rules to try to curb identity theft at auto dealerships and among other creditors who handle people’s personal financial information. Dealers are being urged to train their employees to be on the lookout for identity thieves, including checking to see if the person in front of them looks like the photo on their driver’s license.

* Automotive News, Dec. 5, 2011



Car title loans — who pays, who makes a killing?

High-cost car title loans are illegal in most states. That’s because they’re so risky for borrowers, often ruining lives. Particularly when people lose their cars — usually their only way to get to work — and then their jobs.

In 2004, in response to a two-part series of front-page reports by David Lazarus in the San Francisco Chronicle, exposing the seedy but growing car title lending business, California legislators vowed to put a stop to title loans.  Fast-forward almost a decade, and what’s changed?  Nothing — except the shady, predatory businesses continue to expand and cost more consumers triple-digit interest, and often their vehicles.

How high is the default rate for car title loans? At a hearing before the California Assembly Banking Committee, Oscar Rodriguez, CEO of LoanMart, testified on behalf of the leading trade association for car title lenders operating in California.  When asked, point-blank, he admitted that while some lenders have default rates of 14-15%, others have rates up to 40-50%. This is astronomical, and powerful evidence that the loans are predatory — not designed to aid the borrowers, but to strip them of their only valuable material possession — their car.

California caps the interest rate on some loans below $2500. So title lenders skirt the law by talking consumers who seek smaller loans into getting loans over the $2500 threshold. Consumers naturally assume that must mean that they qualify to borrow more, based on their income or creditworthiness. In reality, their credit has nothing to do with the loan amount. As long as the lender can seize their car, and it’s worth much more than the loan, there’s no risk for the lender.  Of course, the bigger loan increases the risk for the borrower.

As the Attorney General of Florida warns: “Remember that a title loan is not risky for the lender but it may be very risky for you.”  How to protect yourself: title loans

So who benefits from car title lending? Award-winning journalist Gary Rivlin’s portrait of who’s living high off the hog thanks to high-cost loans, including car-title loans:

Portrait of a Subprime Lender

What can you do to avoid the car title lending trap?  If at all possible, save up instead of getting a loan. If that’s not possible, find other, less-risky ways to borrow money.  Some lower-risk options: Join a credit union. Seek loans from family members. Sell your car and buy a less-expensive one. Usually, you’re much better off selling it yourself than having it repossessed by a car title lender.

Read more:

Auto-title loans drawing scrutiny — Sacramento Bee, by Personal Finance Columnist Claudia Buck

‘Car-title loans’ a road to deep debt  — San Francisco Chronicle, by Business Reporter Carolyn Said

How to protect yourself: title loans — What else can you do in a pinch, that’s less risky? Advice from Florida’s Attorney General




Don’t become a victim of identify theft when you shop for a car

Imagine handing over your personal financial information, including your home address, Social Security number, birth date, and amount you earn each month, to a dealership finance manager who just happens to have a history of engaging in identity theft. Creepy, no?

Unfortunately, some dealers fail to do even basic background checks of prospective employees. As a result, you may end up exposed to identity theft. The FTC has issued “Red Flag” rules aimed at curbing ID theft at auto dealerships, which is a step forward, but — they don’t have the staff or resources to police compliance.

Bottom line:  This is yet another reason to ALWAYS get your financing lined up with a reputable lender BEFORE you shop for a car.

Read more:

Yahoo News report: Could you be a victim of identity theft while shopping for a new car?

Orange County, CA District Attorney busts major new car dealership

KC TV 5: Car dealer facing ID theft charges

F & I  News: Tampa dealer convicted of identity theft, other charges



Sales of service contracts pad auto dealer profits

High-cost service contracts are major profit centers for auto dealers.  One dealer told Automotive News that in 2005 his gross profit per extended service contract was $436.  By the end of last year, it had skyrocketed to $1,178.  (Automotive News, March 11, 2013)

Consumers anxious to avoid unexpected, costly repairs often buy them without realizing they are usually full of loopholes and exclusions that allow companies to deny coverage. For example, they usually fail to cover prior damage, even if that’s the cause of the problem.

Some auto dealers pressure their finance managers to meet a quota of service contract sales, or be fired. Others have tried to sell service contracts at lower, more competitive prices, but then faced litigation by the companies that offer them.

Some dealers mislead car buyers into thinking that they have to buy a service contract in order to get financing. Legal experts say that such deception is illegal, but can be difficult to prove.

CARS recommends that, instead of getting a service contract, it’s smarter to spend about $000 for a thorough inspection before you buy.  Then if the car has major problems, you can decide if you still want it, or take your business somewhere else.  Also — beware of dealers who try to sell you service contracts that kick in at the same time as the warranty, and expire just when you might need them.


Car dealers sue to keep car buyers captive, attack Tesla

Ever wonder why you can’t just order a new car over the internet, directly from the manufacturer? Then pick it up at the factory, or a local showroom, like people do in Europe? It’s because U.S. auto dealers have used their political muscle to get laws passed in all 50 states that give them a special monopoly. Those state franchise laws insulate them from having to compete with manufacturers for your business.

Car dealers got the laws enacted because they know that, given a choice, most car buyers would never subject themselves to the typical car-buying experience.

Car dealers are now attacking electric car manufacturer Tesla in court and in state legislatures, seeking to bar the company from selling its highly-praised electric vehicles directly to the public. Tesla is wise to be wary of auto dealers. As a group, auto dealers are throwbacks to the era of horse-trading. They have been among the most aggressive opponents of advances in fuel economy standards. They also have a long history of opposing mandates to produce electric vehicles.

Car dealers repeatedly sued the U.S. Environmental Protection Agency, seeking to block higher fuel economy standards. They waged all-out war against improved fuel economy in Congress. The end result, of course, was that when the price of gas rose, the value of their gas-guzzling products tanked, leaving their customers upside down in their overpriced loans. Then we bailed them out, at taxpayer expense, including the $3 billion they got from “Cash for Clunkers.”

Plus auto dealers commonly engage in a laundry list of shady or downright illegal practices that add billions onto the price of financing cars — hard-earned money that could be spent to get a newer, safer, cleaner car.

Think you might like to have the freedom to buy directly from a manufacturer someday?  Now it’s only a pipe dream for car buyers in most states — unless you’re willing to travel to Europe — but someday it may become reality here in the U.S.

Read more: National Public Radio report


Dealer ordered to pay off loans on traded-in vehicles

In response to dozens of complaints from consumers who were stuck struggling to make payments on vehicles they had traded in, plus the cars they bought, Washington State’s Attorney General ordered dealerships owned by Mark Gilbert to pay off the liens on the traded-in vehicles.

Washington state law requires auto dealers to pay off the remaining balance consumers owe on traded-in vehicles within two days after they make a new purchase. Typically, the amount owed on the trade-in — known as “negative equity” — is added onto the price of the newly purchased car.

According to the Attorney General’s office, “The Walla Walla County Superior Court..entered a preliminary injunction, ordering several Northwest auto dealerships owned by Mark Gilbert to comply with Washington dealer and consumer protection laws, requiring prompt payoff of customers’ trade-in vehicles.”

The Attorney General’s legal case involved car dealerships Gilbert owned that sold new Honda, Jeep, Dodge, Chrysler, Nissan, and  Ford vehicles.

How can you protect yourself from this scam? The safest thing to do is to wait to buy your next car until you have paid off the loan on the car you are currently driving. Otherwise, you risk having both cars repossessed if the dealer fails to pay off the loan on the car you trade in.  Plus you sink deeper into debt. And — always insist on seeing the title to the car BEFORE you buy. If the dealer doesn’t have the title, the lender for the prior owner can repossess your newly purchased car — even if you are making all the payments in full and on time to your lender.

Read more:

Washington State Attorney General Press Release

“The financing fell through” — car deals gone bad

It’s a consumer transaction like no other. When you buy any other product or service, once you’ve signed on the dotted line, the seller can’t unilaterally change the deal. But then you set foot on a car dealership lot, and it’s like you’ve entered a parallel universe where suddenly the rules of the road no longer apply.

No other shopping experience in your life prepares you for what auto dealers try to pull. It’s called “yo-yo” financing. It’s a shady practice that has made headlines nationwide, and is becoming notorious, but continues to happen at auto dealerships every day, all across the country.

You negotiate to buy a car. You reach an agreement. You make a deposit and trade in the car you own. You are then sitting across the table from the Finance Manager, who is all smiles and claims to be on your side. He says he’ll get you the “best terms” on a car loan. He shows you the federally required Truth in Lending disclosures. Total amount financed. Monthly payment.  You look it over, it appears to be reasonable, and you sign the Retail Installment Contract. The salesman hands you the car keys, and off you go, in your newly acquired car. Life is good.

But then a week or two later, you get a phone call from the dealership. They say that the financing “fell through.” They want you to go back and sign another contract. On worse terms. The interest rate you agreed to was 4%. Now they want to charge 16%. Or 20%. The monthly payment was a manageable $240.  Now it will shoot up to $480.   They claim that your credit isn’t as good as they thought. Which makes no sense, since they pulled your credit report before financing the car. Given electronic communications, they knew within seconds what rate you qualified to get.

What they’ve done is known as “de-horsing” — a term that harkens back to horse-trading days. Their goal is to get you out of the car you own, and take you out of the market and trap you into a deal with them. Once they have your trade-in and down-payment, chances are good you can’t just go somewhere else and buy a car on better terms.  They have you over a barrel.

If you balk at signing the new contract, they will threaten to report it as stolen.  Or they’ll threaten to repossess the car, and ruin your credit. If you drive back to the dealership in your newly purchased vehicle, they may park cars on both sides and behind it, to block you from being able to leave, until you sign the new contract. Typically, they refuse to return your deposit. They also claim they already sold your traded-in car, even though it’s actually sitting on a back lot.

You feel trapped into signing, even though it will cost you thousands more than you had initially agreed to spend.

This is the twisted world of “yo-yo” financing. The dealers claim that the financing “isn’t final” — even though you reached an agreement and signed a contract.

The ONLY way to make sure you don’t fall into the yo-yo trap: NEVER, EVER get a loan from a car dealer. Always get your own pre-approved loan. And don’t fall for it if the dealer claims it will get you better terms. Because those can change after you drive off the lot.

CARS recently heard from a consumer, Michael L., who was being scammed by a major car dealer in Sacramento. He and his fiancee are expecting their first child in a few months and wanted a bigger car.   Michael had pre-qualified for a loan at around 10%. He had the check, from Capitol One, in hand.  The dealership finance manager promised a lower interest rate. Thinking he could save some money, Michael agreed to go with dealer financing. Then came the phone call — sorry, the loan “wasn’t approved” at the lower rate. The dealer demanded that he pay 18%.  So instead of paying $23,000 for the loan, Michael was going to have to pay over $30,000 to finance the same car.

He contacted CARS and we brought his case to the attention of a major national news organization. When the dealership found out about the potential news coverage, it backed down and Michael got to keep the car on the original terms. He said he’d learned his lesson — never trust a car dealer, especially not on the financing.

Who needs car dealers?

If you want a new car, unless you are buying a Tesla, you are probably going to be forced to buy from a car dealer. That’s because car dealers in all 50 states have paid legislators handsomely to enact special franchise laws that give them monopolies over new car sales. This leaves new car buyers with little choice, but to buy from a dealer.

But used cars are another story. Each year, millions of American consumers buy and sell used cars directly to each other — without having to pay a middleman.  Why is this kind of transaction so popular?

  • You can save thousands of dollars
  • You can avoid major headaches and hassles
  • You can get a newer, cleaner-running, safer, better vehicle — for the same amount of money you would have paid for an older, dirtier, less safe vehicle from a dealer.

According to the Better Business Bureau, year after year, auto dealers are the #1 source of consumer complaints to the BBB.  So why go there?

The average dealership sales transaction takes approximately 4 hours, and is designed to wear you down and get you to the point where you will sign anything, just to get it over with and leave.  Some consumers have been literally held hostage at dealerships that took the keys to their cars– supposedly to evaluate them as a trade-in — then refused to give them back — until they bought a car.

Common scams you can avoid when you buy from a private person —

  • Sales of unsafe, recalled vehicles — it seems incredible, but — the National Automobile Dealers Association has taken the official position that its dealer members should be able to sell you an unsafe, recalled used car that hasn’t been fixed. Even though the fix is FREE. In some cases, innocent, unsuspecting used car buyers have been maimed or killed in recalled vehicles sold to them by licensed dealers — who claim it’s not their responsibility if the car was under a recall.
  • “Yo-yo” financing — basically, bait and switch on the terms of the loan. You sign a contract with the dealer, that says you’re going to pay 4% or 5% interest. You leave a down payment and trade in your old car. You drive off the lot and everything seems fine. Then you get a call from the dealer telling you that you have to come back because the financing “fell through” — which is a lie. But if you refuse to return and sign a new contract to buy the car at, say, 16% interest, or give the dealer a bigger down payment, or both, the dealer threatens to repossess your car, or report it as stolen.  The dealer refuses to give you back your down payment and traded-in vehicle, to trap you and keep you from being able to go elsewhere to buy.
  • Dealer “markups” — hidden kickbacks that increase the price of auto loans from car dealers, and cost consumers over $25.8 billion in a single year.  Dealers get kickbacks from lenders, in exchange for raising the interest rate on your car loan beyond the rate you actually qualify to get. This extra charge is not based on risk, but on the dealer’s assessment of how much they can get away with charging you, after sizing you up, including  checking out your profile in databases that have your personal information sliced and diced by literally hundreds of criteria.

Read more about auto dealer markups

  • Falsified loan applications — after you fill out and sign an application for a loan, indicating that your income is $2400 a month, the dealer changes it to $12,400 a month, to get you into a loan that you can’t possibly afford. But the dealer gets credit for the sale anyway, and collects a bonus from the manufacturer, even if you eventually default and lose your car, and your credit is trashed.
  • Forgery — The dealer signs your name on documents that allow the dealer to access your personal checking account and set up an automatic payment to the dealer, every month. Or the dealer signs your name on documents saying that you purchased a $3000 extended warranty, when you turned it down. While this is a crime, it’s extremely rare for any law enforcement officials to do anything about it.
  • Identity theft — Some dealers have been arrested and convicted of committing identity theft.  Hundreds of others have gone out of business, leaving loan applications, purchase contracts, and other documents with personal information in dumpsters, or abandoned dealership buildings, leaving customers vulnerable to identity theft.
  •  Odometer tampering — this crime is burgeoning, thanks to crooked dealers who purchase gadgets on the internet that allow them to simply re-set odometers. This can cost you thousands by tricking you into buying a car that is worth far less than what you paid. It will also need major, expensive repairs that will not be covered by a warranty or extended service contract, since warranties and service contracts exclude cars with odometer discrepancies.
  • Salvage fraud — Dealers sell wrecked or flooded vehicles they obtain at auction for a fraction of what they would cost, if they hadn’t been severely damaged. Then they give them a quick, cheap once-over, to make them look appealing, without doing any of the expensive repairs necessary to make them safe and reliable. For example, the dealer fails to replace the air bags, which deployed in a crash. Or fails to replace the electronic systems on a flood car, which have been contaminated and will corrode and malfunction.
  • Binding mandatory arbitration —  If you have a major problem with a car dealer, you may think you can sue. The law may even be on our side. But  you may never get to court, since the contract you signed had a clause — hidden in the fine print — that says you are giving up your Constitutional right to a trial before a court of law. Instead, you must submit your complaint to a private “arbitrator” who works for a company that is funded by the dealer. Studies show that “arbitrators” almost always rule in favor of the company, and against the consumer. Plus the “arbitrators” are totally free to ignore the law.  Consumer groups tried to change the federal law that allows car dealers to get away with this — but the dealers killed it.  Now all of them have clauses in their contracts to keep you from being able to haul them before a judge.

Why subject yourself to being scammed by a shady auto dealer, when you can take control of the sales process and get a much better deal from another consumer? If you follow about a dozen simple steps, you can get a safe, reliable, fuel-efficient car and save yourself a lot of time and money.

Tips from CARS on how to buy a good, safe used car

Tips from on how to sell your own car


Avoid GAP insurance rip-offs

If you’re buying a car from a dealership, resist high-pressure tactics aimed at getting you to buy “GAP” insurance. What the finance manager doesn’t tell you is that auto dealers make a lot of profits from the sales of GAP, or “Guaranteed Asset Protection” policies.

Dealers hike up the price, and add it onto your loan, where it can cost you $1000 or more extra, over the life of the loan. Some charge double or triple what you would pay if you bought GAP separately from a reputable insurance company. Finance managers are usually paid an extra bonus based on how many GAP products they sell. So they have a personal financial incentive to pressure you.

The purpose of GAP is to cover you if your car is stolen or totaled before you pay off the loan. The “GAP” is between the amount of the loan and the worth of the car. If there’s a large difference, it’s a sign you’re paying too much for the car.

It’s better to get a less expensive car, or wait until you can pay more of a down-payment and get a shorter loan, or pay cash, instead of paying extra for GAP.

If you do decide you want GAP coverage, shop around and avoid buying it at the dealership. Why?

One major pitfall to buying GAP at dealerships: many dealers collect the GAP payment, but pocket it themselves, and fail to activate the policy. Some dealers have been arrested and prosecuted for this scam, but even then, their victims were not able to recover their losses.

As a result, consumers who paid for GAP, and believed they were protected, got a rude awakening when their car was stolen, or totaled. When they contacted the insurer that was supposed to pay their claim, they found out they weren’t covered. Suddenly they had no car, and still had to pay thousands extra for the difference between the amount of the loan and what they collected from their auto insurer.

Another problem with buying “GAP” from dealers — often, the policies they sell have loopholes that exclude coverage, in the fine print. So consumers end up paying extra for worthless GAP policies that leave them unprotected.

Bottom line: either don’t buy GAP, or get your own coverage directly from a reputable insurer. Many offer GAP polices, and it pays to shop around.

Car Dealer Apologizes for Having Customer Arrested

The owner of a car dealership in Virginia has apologized to a former customer who was arrested and hauled off to jail for “auto theft” — even though he had a signed contract to buy the car he supposedly had stolen.

Unfortunately, many dealers threaten their customers with arrest, if they balk at signing subsequent contracts on worse terms — a scam known as a “yo-yo” sale. Some dealers have even gotten authorities to prosecute and convict their customers — even though they had a signed contract, the keys, and all other relevant records. Some had even started making payments.

This is yet another reason why it’s smartest to NEVER get financing at a car dealership, and to immediately seek legal help from an auto fraud expert if a car dealer threatens you with arrest.

Read more:
Virginian Pilot report


Car Dealer Arrested by Federal Agents

The former owner of a Suzuki dealership in South Carolina and eight of his former employees have been indicted and are facing federal charges. Prosecutors say they used deceptive advertising that promised low monthly payments to entice customers to buy new cars.

According to the charges that were filed, the deceptive advertising and sales scheme occurred from 2006 through August, 2008.

In TV and radio ads, plus direct mail to consumers, Gibson and his co-defendants allegedly lured customers into buying cars, promising them very low monthly payments — usually between $44 and $99 — and here’s the kicker — at the end of several months, they could trade in the car for new one, at no additional cost.. However, when the “promotional period” ended, the customers’ payments skyrocketed. They were also not allowed to swap cars. Thus, they were trapped with high payments that busted their budgets.

According to a news report in the South Carolina Herald-Journal, “one couple bought a Suzuki in March 2007, [and] agreed to make monthly payments of $47 and were soon slapped with demands for $509 a month to keep their sedan.”

Under a court order issued in 2009, dealership customers divided $2.7 million in funds established by American Suzuki Motor Corp., lenders and the company’s insurance carrier.

Assistant U.S. Attorney David Stephens is prosecuting the case with the assistance of the U.S. Postal Service and the FBI.

Read more:

Spartanburg, SC Herald-Journal, Sept. 14, 2012


Car Title Loans — Legalized Auto Theft?

Need cash in a hurry? Own your own car? Watch out for companies that advertise they’ll give you a loan, in exchange for the title to your car. They’re known as “car title lenders.” They charge wildly exorbitant interest rates — sometimes 185% or more. Worst of all, they tend to use tricks and traps, to take away your car. For example, they may demand payments in person, on a specific day. When you go to the store to pay, they spring the trap. They are closed. Next thing you know they have seized your car.

Or they may have a clause hidden in the fine print that says if you move, you have to notify them by mail — or they can repossess your car. So even if you make your payments after you move, and they know exactly where you are, if you didn’t give them written notice, they can take your car.

California Assemblymember Roger Dickinson is trying to improve protections for consumers who resort to car title loans, in a pinch. He authored a bill to cap the interest rate on car title loans at 36%. Florida already enacted a similar law, after military Servicemembers and their commands testified about the harmful impact of shady car title lending practices on military personnel and their families.

However, the car title lending industry fought back in California, and the bill was watered down to require prominent disclosure of the interest charges, instead of capping them. Plus it would require car title lenders to check consumers’ creditworthiness and use responsible underwriting guidelines, and prohibit them from reporting negative information to credit reporting agencies.

Sederia Lewis of Oakland CA testified at the Capitol in Sacramento, in support of Dickinson’s bill. Her written testimony stated the following:

Good afternoon. My name is Sederia Lewis. I live in Oakland. I want to thank Assemblymember Dickinson for authoring this bill. I lost my car and thousands of dollars because of predatory car title lending practices. This has been a real hardship for me, especially since I am disabled, and it’s often hard to get to work and to medical appointments.

I knew that I needed safe, reliable transportation. So I purchased a new 2007 Lexus. I paid over $37,000 in cash. I planned to own that vehicle for 10 years or more. No matter what else was going on, I kept it well maintained. That car was my lifeline.

When my husband and I split up, I needed to get established on my own. I needed cash to tide me over and meet immediate expenses. I went to a cash advance store, and when they found out I owned my own car, instead of giving me a loan, they told me I should contact 1-800-Loan-Mart.

At the time, my main source of income was Social Security disability payments, in the amount of about $800 a month.

On June 30, 2008, I went to the Loan Mart office in Encino. I wanted to borrow $3,500. The salesman tried to talk me into borrowing more — $5000. I told him no. I asked him how much the interest would be on the loan. He didn’t tell me. He just said it was “only simple interest.” I asked him how much it would cost to pay off the entire loan, and he said it would be a total of $4,515. That sounded reasonable to me, so I agreed to the loan. He gave me a document to sign, without showing me the interest rate, and I believed him that it reflected our agreement.

It was only later on that I found out that the real cost of the loan was going to be $13,383 and that the interest rate was 91.86%. That’s ridiculous. If I had known the interest rate was that high, I would never have agreed to the loan.

My monthly payment was $383. I made several payments, then missed one, and then made more payments. In December of 2008, I made two payments, both for $383. But the amount past due and the penalties kept adding up. In January, I received a billing statement from Loan Mart that said the total due by January 28 was $1,222.

But I didn’t even get a chance to make that payment. That’s because on January 19, my car was repossessed. With no warning. I thought at first it was being stolen. Then they sold my car at auction.

According to an attorney who researched my case, the Blue Book price for my car, at auction, should have been about $22,000. But Loan Mart sold it for just $16,500. On top of that, Loan Mart charged me an extra $460 for the repossession, and another $422 for a key. For a car that was worth more than $25,000 at retail, if I had been able to sell it myself, I got just $9000.

That small car title loan — which they said would cost me just $4,515, instead cost me my car, plus more than $7000 in direct losses. It cost me my mobility, and my main means of looking for work. I now also have a repossession on my credit report, which makes the price of credit for everything skyrocket.

I think there should be caps on the interest car title lenders can charge. 36% is plenty. At the very least, they should be required to adopt more responsible lending practices.

Assemblymember Dickinson’s bill is a significant step in the right direction, and I urge you to please vote AYE.

Thank you.

The CEO of 1-800 LoanMart appeared and testified against the bill, claiming the loans are better than going to a loan shark. As one title lender told the Los Angeles Times, “At least we don’t break legs.” Despite Sederia’s testimony, and support from CARS, the bill failed to pass. As a result, consumers in California who have fallen on hard times and get car title loans still face sky-high interest rates and risk losing their only means of getting to work or medical appointments.

What can you do to avoid falling into the car title loan trap? First, join a credit union. Don’t wait until you need an emergency loan.  Work with them to improve your credit. Most credit unions offer classes and personal assistance with credit-building.

If you do need an emergency loan, ask your credit union to consider a small loan at a much more reasonable interest rate. In general, credit union loans are capped at 18% interest — making them much more affordable than an 185% interest loan — without risking your car.

Another option — find out how much your car is worth, using a guide such as Kelly Blue Book, Truecar, or Consider whether you may be better off selling it and buying a less expensive vehicle. If you are going to lose your car anyway, you are better off selling it yourself, instead of having it repossessed by a car title lender.

Read more:

“Title loans’ interest rates literally out of control — Los Angeles Times, February 8, 2011

Did a car title loan company try to scam you or take your car?  CARS is working to reform car title lending practices, and we want to hear from you. Here’s where to contact us:

Contact CARS