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Entry bubble The Truth About Car Title Loans

By: Editor | August 11, 2009 | Category: Money

money in mousetrapWe have another guest blogger today. Marietta Jelks is the editor of the General Services Administration's Consumer Action Handbook.   

As editor of the Consumer Action Handbook , I was sickened to hear about car title loans, a form of predatory lending, because they prey on the most vulnerable and desperate consumers. In a title loan, a consumer in need of quick cash, will use their car title as collateral for a short term loan. No job or postdated checks required. Sounds simple enough, right? Wrong.

What the title lenders don’t say in their commercials is that you have to turn over your car title and keys when you get the loan. They’ll loan you a small fraction of the car value at sky high interest rates - as much as 25% for one month (300% APR)!! At the end of the month you are expected to pay the whole amount back, plus the exorbitant interest.

If you can’t pay the loan there are only two options. You could roll the loan over for another month, with more fees and interest. This generally leads to a dangerous cycle of borrowing and rolling over the loan amount. As the loan amount increases, it becomes almost impossible to pay the debt. The other option is for the company to repossess your car. Some companies even install GPS and starter interrupters when you take out the loan to make the repossession easier. Talk about customer service!

Unfortunately, there is no federal regulation of title loans now, but some states have put some rules in place to regulate the interest charged by these companies and investigate complaints against them. If you find yourself in a cash crunch, consider all of your options. Between family, non-profit organizations,  and Extension offices, there are solutions available.

For information on other predatory lending practices:

HUD - Predatory Lending Practices

USA.Gov 

St. Louis Federal Reserve Bank

Let us know if you’ve ever had an experience with a car title loan.

| View Comments [8] | envelope E-mail This Entry | Tags: auto   car   car_title   car_title_loan   loan   money   repossess  

 

Entry bubble Can You Still Get Cash for Used Cars?

By: Joanne | August 04, 2009 | Category: Money

Car Allowance Rebate System (CARS) logoYou’re probably familiar with the CARS program by now – you know the program that offers cash to people who own old, fuel inefficient cars to help them buy new, fuel efficient cars.

Even though the program is still very new, it’s been so popular that it’s almost out of money. The Consumer Assistance to Recycle and Save Act of 2009 that created the program allocated only a billion dollars (I can’t believe that I just used the phrase “only a billion dollars”) for the whole program. When the money runs out, the program ends.

The House of Representatives has decided that they don’t want the program to end and passed a bill on Friday to allocate more money so more people can take advantage of the program. The Senate is considering the issue this week.

I did a post about the CARS program about a month ago, and I heard from a lot of you. Some people like the program, some people don’t. Many of you are like me and have an old clunker that doesn’t qualify for the program. Rats.

Well, now is the time to contact your Senator and let them know what you think about the program.

| View Comments [12] | envelope E-mail This Entry | Tags: car   cars   cash   clunkers   efficient   fuel   joanne   new   trade   used  

 

Entry bubble Cash for Your Used Car

By: Joanne | June 30, 2009 | Category: Money

Car Allowance Rebate System (CARS) logoLast week President Obama signed the Consumer Assistance to Recycle and Save Act of 2009 into law. The new Car Allowance Rebate System (CARS) program offers cash to people who own old, fuel inefficient cars to help them buy new, fuel efficient cars.

Sounds interesting? You bet. Who doesn’t want to spend less money on gas, reduce greenhouse gas emissions, reduce our dependency on oil and increase energy sustainability AND get a shiny new car in the deal?

How does it work? Now that it’s a law, program details are available. Here are some quick facts – visit cars.gov for more details.

 

  • The amount of the credit is $3,500 or $4,500 depending on what you trade in and what you buy
  • Your car must be less than 25 years old
  • You must buy or lease a new car
  • Generally, your trade-in must get 18 or less miles per gallon (some very large pick-up trucks and cargo vans have different requirements)
  • Your trade-in must be registered and insured continuously for the full year before the trade-in
  • You don't need a voucher, dealers will apply a credit at purchase
  • Program runs through Nov 1, 2009 or when the funds are exhausted, whichever comes first.
  • The vehicle that you are trading in is required to be destroyed. Therefore, the value you negotiate with the dealer for your trade in is not likely to exceed its scrap value. The law requires the dealer to disclose to you an estimate of the scrap value of your trade-in vehicle.

 

Watch out, I’ve already heard reports that fraudulent websites have popped up, pretending to offer information about the CARS program but they’re really phishing for your personal information. Stick with the official CARS website for official program information.

p.s. Don't forget to submit your Independence Day photos on the USA.gov and GobiernoUSA.gov Flickr Group

| View Comments [16] | envelope E-mail This Entry | Tags: car   cars   cash   clunkers   efficient   fuel   joanne   new   trade   used  

 

Entry bubble Wear Your Seat Belt

By: Joanne | May 19, 2009 | Category: Travel

click it or ticket

Here’s a tip: wear your seat belt when you’re in the car this week, because the police are cracking down and ticketing people violating seat belt laws.

This week is the Click it or Ticket National Enforcement Mobilization Campaign. According to the National Highway Traffic Safety Administration, only 83 percent of Americans are using seat belts. What really surprised me was that the national data actually indicates that seat belt usage actually went down in many states between 2007 and 2008. I was also surprised to see that night time seat belt usage is significantly lower than day time usage.

I’m a big seat belt advocate. When I was a kid, my parents always insisted that I wear a seat belt in the car – they even got seat belts in the back seat when that was optional equipment. I started wearing seat belts when I was young, and I never stopped. I’ve been in 3 car accidents in my life, and I’m certain that each time my seat belt saved me from injury. I remember getting in the car with my cousin one day and scolding her for not wearing a seat belt. She told me that she didn’t like seat belts because they’re uncomfortable. “So’s a traumatic head injury!” I replied.

So once you get into the habit of wearing your seat belt this week, keep it up.  It’s one of the many little things you can do to help yourself and your loved ones stay safe and healthy.

| View Comments [5] | envelope E-mail This Entry | Tags: belt   car   joanne   police   safety   seat   ticket  

 

Entry bubble Slow Down in that Work Zone!

By: Stephanie | April 06, 2009 | Category: Health

warning sign that says road work ahead In the past when I'd come upon a work zone and have to slow down, I'd get as irked as any other driver. Like everyone else, I'm often in a hurry.

But after researching for this post last week, something changed in me. I learned some statistics that made me want to slow down in a work zone.

The Federal Highway Administration reports that every year, more than 40,000 people are seriously injured in work zone-related crashes, and more than 800 people are killed. Did you know that most of those injured or killed are drivers and passengers?

This is the 10th annual National Work Zone Awareness Week, which kicks off at the start of the construction season to attract national attention to drive carefully through highway construction and repair sites.

Most deaths and injuries in work zones are caused by rear-end collisions. Many collisions occur before the construction work zone begins, where lanes close and cars merge. Drivers cutting in at the last minute cause sudden stops, and inattentive drivers going too fast aren’t ready for traffic to slow or stop.

And most work zone accidents don't occur at night during a storm—they mostly occur in daylight, on a clear or cloudy weekday.

Some basic "Safety Tips to Live By":

  • Pay Close Attention. Signs and work zone flaggers save lives.
  • Don't Tailgate.
  • Keep Up with the Traffic Flow.
  • Minimize Distractions. Avoid changing radio stations and using a mobile phone while driving in a work zone.
  • Be Patient. Remember that work zone crews are improving your future ride.

To help you be patient, check out a database where you can search for road construction projects in the U.S. and Canada. You'll finally know what that work zone you pass everyday is for, and when it's scheduled to be completed.

And for some fun: help name the National Work Zone Safety Information Clearinghouse mascot (voting closes at 10 AM EDT today).

Do you have any work zone stories to share?

| Post a Comment | View Comments [4] | envelope E-mail This Entry | Tags: car   collision   construction   fhwa   highway   safety   stephanie   work_zone_awareness_week  

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