My question involves a consumer law issue in the State of: Alabama
Tile pawn. i Want to vol. repossess my car. Where the title loans are pawn shops not conventional lenders
My question involves a consumer law issue in the State of: Alabama
Tile pawn. i Want to vol. repossess my car. Where the title loans are pawn shops not conventional lenders
Tell them you aren't going to pay and see what they say.
If you're asking whether your title lender will accept your vehicle as partial or full satisfaction of the amount of money you owe, you can ask them if that would be sufficient to resolve your debt. If this is in fact a title loan, the loan would typically be much lower than the value of the car, with the creditor able to keep the car upon your default without giving you any credit for its value.
As a general rule, a lender does not have to repossess your car if they prefer to pursue you for the money, nor does repossession guarantee that a sufficient amount will be recovered from the eventual sale of the car to fully cover your debt. As your state regulates car title loans under the pawnshop act, it's less clear what the lender's remedies would be if they don't want to repossess; or whether other remedies are available. You should start by reading your contract with the pawn shop / lender.
If your car has sufficient value to pay off the debt, perhaps you can find a buyer who is willing to buy the car and pay off the debt as part of the agreed purchase price. You should get considerably more money from selling the car privately than you will get from its sale at auction after a repossession, and you won't be on the hook for the cost of repossession.
My understanding is that they usually only loan 30%-50% of the value of the car and that the way the loan is written is more like a pawn than a car loan in that the title loan outfit gets not just the value of the car and associated repo costs but anything they get from the car.
Per the Alabama pawn shop act you are not obligated to make any payment on law pawned property and the broker accepts the property as full value of the pawn loan. That would support payrolguy’s statement that the broker is entitled to keep any money realized beyond the pawn loan debt when selling the vehicle.
The problem I did not see addressed in the law is if you continue to drive the vehicle and damages it, who is liable for the damages. My suspicion is the person pawning the property would be liable to relinquish the property in a condition it was presented when the loan was made.
So, how about some additional information.
Good point. I looked at a couple of Alabama title loan websites and saw no requirement for insurance. All they wanted was clean title, ID and a job.