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Friday, March 29, 2013

Another car title lender opens in Annandale



TitleMax opened on Little River Turnpike, Annandale, March 21.

If you’re in need of instant cash at exorbitant rates and willing to risk losing your car, you’ve got plenty of options in Annandale, including a brand new TitleMax store at 7409 Little River Turnpike.

TitleMax provides loans of up to $5,000. Interest rates range from 9.99 percent to 12.99 percent, with the lowest rates for the largest loans, said Tim Brown, general manager of the Annandale store. According to Brown, Title Max offers “the best rates in the industry.”

Don’t be fooled by the rates quoted, though. A 9.99 interest rate on a $5,000 loan translates to an annual percentage rate (APR) of 284 percent. That means a borrower would owe more than $800 in interest charges if the loan is paid off in six months and over $1,400 in 12 months.

Fast Auto Loans on Little River Turnpike, Annandale.
Anyone can get a loan from TitleMax, regardless of credit history, as long as you have the title to your car. A company representative conducts an appraisal, evaluating the vehicle’s overall condition and mileage, before letting you know the amount you can borrow, Brown said. Loans must be repaid within a year. If borrowers can’t make the payments, he said, TitleMax takes ownership of the car.

TMX Finance, the company that operates TitleMax, is expanding throughout Northern Virginia, Brown says. There are nine stores in Fairfax County, including branches that opened with the past few months in Burke, Bailey’s Crossroads, Tysons, and Seven Corners.

“The team at our new TitleMax location is excited and ready to help the residents of Annandale, VA, obtain the short-term cash loans they need,” said Otto Bielss, senior vice president of operations for TMX Finance. “We look forward to being a part of the local community and encourage those who may need our services to contact our new branch.”

The new TitleMax is just a few steps away from Fast Auto Loans, at 7345 Little River Turnpike. There are also two LoanMax locations in Annandale—at 7221 Little River Turnpike and 7109 Columbia Pike—and four others in Fairfax County.

Both Fast Auto Loans and LoanMax offer loans up to $10,000. LoanMax doesn’t publish interest rates online, but Fast Auto Loans reports that an annual percentage rate (APR) of a typical loan of $1,000 is 246.35 percent.

Title loans are geared to people with an immediate need for cash—to pay for medical bills, a business crisis, funeral, or other emergency—and have a bad credit history so they can’t get a credit card or bank loan. Borrowers must own a car free and clear. Judging by the online complaints about these loans on various websites, many borrowers fail to fully understand the true cost of these loans when they sign a contract.

A report on car title loans, Driven to Disaster, published in February by the Center for Responsible Lending, finds the APR on title loans “especially excessive considering the value of the collateral and the relatively low amount of the loan.”

The report says the typical loan nationwide is $951 with an APR of 300 percent, with the full payment due in one month. The report quotes the TitleMax president as saying “customer loans are typically renewed at the end of each month and thereby generate significant additional interest payments.” A consumer who borrows $951 and renews the loan eight times would on average pay $2,142 in interest (or $3,093 in interest and principal), the report says. Even worse, one out of every six loans incurred a repossession fee—typically $350 to $400—which is added to the borrower’s running balance.  
                                    
Car title loans are legal in 21 states. The Virginia General Assembly, however, passed legislation in 2011 making it easier for car title lenders to do business in the state. Del. Scott Surovell, a Democrat whose district includes the Route 1 corridor, a hotbed of car title and payday lenders, introduced legislation in the most recent session to restrict these lenders. The bill didn’t get anywhere, though, due to pressure from industry lobbyists.

12 comments:

  1. WISH we could zone these parasites out of our neighborhood! I think that (say) two such institutions ought to be sufficient for all of Annandale...

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  2. Ugh. Not what we need. How do these guys stay in business??

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  3. Thank you for accurately writing a story about what these companies actually are and how they dumb-down and degrade the town that we all live and work in. It's such a shame that this is the strategy for Annandale's economic development. Good reporting.

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  4. Annandale is being revitalized with Car Loan businesses. These places are no different from the Mafia and their loans except instead of losing a car they broke your hands. The interest is the same and you still have the fear.

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  5. According to Delegate Kaye Kory: The car title and payday loan companies can be regulated by local government through ordinances. Fairfax County does not limit payday and car title loans. The state generally does not interfere with land use, as you know because I have complained about this frequently. I think we ought to petition Fairfax Co to regulate the number of payday/car title loan shops per mile.

    We need to start a petition to get Fairfax County to limit the number per mile. According to Senator Dick Saslaw, he got the law changed so that the title company can't collect on the loan for 3 months so people are gambling that they can pay the loan back by the time it's due. This is gambling and we all know the house always wins. We do not need this type type of business in our county, this only brings the economy down because people are losing their cars, their homes and on on.

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  6. Because of this social and visual blight, State Senator Dick Saslaw gets no more votes from me, and I hope he has a challenger in the next election.

    It was his legislation, passed in 2011, that encouraged these. Here is the summary of SB 1367, 20111: "Motor vehicle title loans; nonresidents. Eliminates provisions that prevent motor vehicle title lenders from making title loans to individuals whose motor vehicle is registered in another state. Currently, a title lender is required to have its security interest in the motor vehicle added to the vehicle's certificate of title by complying with the requirements of Virginia's motor vehicle laws. This measure will allow title loans to be made to nonresidents of Virginia provided the lender's security interest is added to its certificate of title by complying with the laws of the state where it is registered. "
    Car title loans are the new payday lending loans.

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  7. Count me in for the petition to limit the number of title loan establishmemts. There are so many here now that it is almost embarrassing to say that I live in Annandale.

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  8. These are not the type of businesses we need, but they are legal - and apparently have the backing of Saslaw, so hopefuly they are just here short term until the economy starts growing again.

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  9. So tired of more of the same types of businesses establishing themselves in Annandale. If you want pizza, Korean food, car loans, or a drug store... Annandale is the place to go. Sheesh. Would be nice to see some variety and would be even nicer to see our government and chamber of commerce do something to attract businesses that will attract the kind of attention that,say, the new Mosaic District, gets. If it can be done in Merrifield or even down 236 in Fairfax (seen the revitalization of the shopping center on the corner of Pickett and Main, Fair City Mall area?), why can't it be done in Annandale?

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  10. One of the obstacles to redevelopment in Annandale is the small size of most of the properties. A large project would require landowners to consolidate. Another problem is the lack of mass transit.

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  11. Sen. Saslaw defends his support for car title lenders by saying that, without them, people needing fast cash would be "at the mercy of street borrowing."

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  12. Vote Saslaw out of office - he is out of touch with the people

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