When you’re signing on the bottom line to buy that new car or truck, you’re excited. You’ve probably spent weeks or even months researching to find the right vehicle, you’ve been getting your finances in order, and you’re excited to finally take that vehicle home.
What you’re not thinking about is what happens when an emergency strikes in the future. Suddenly, you need to get cash in a hurry, and the only way to do it is to use your car as collateral so that you can get a short-term loan.
If you do it, according to a report that came out last year, the odds are one in five that you’re going to lose your car. In about 20 percent of cases, the vehicles are taken when those who borrowed the money don’t pay it back on time.
You do generally know about this up front. You understand the risks, but you’re in a bind. What you also need to know is that these repossession rates are very high, so there’s a good chance that the short-term loan isn’t going to get you out of the bind. It’s just going to make things worse since you’ll lose your car as well.
Things happen; life gets tough. Jobs are lost and emergencies blindside you. The last thing you need is for a risky financial decision to make things even worse. It’s important to know about all of your legal options when you’re facing a situation like this, especially if you think the car is being wrongfully repossessed. Be prepared to look into everything you can do to protect yourself, your family and the assets that you own.
Source: Tech Times, “1 In 5 Auto Title Loans End In Car Repossession: CFPB Study,” Katrina Pascual, accessed Jan. 11, 2017
