what is it and how does it work

Car pawnshop is an organization that provides an opportunity for a client to get a loan secured by a car for the required period.

Such a service differs from bank lending with a car pledge in that it involves the transfer to the organization of not only the vehicle title, but also the car itself, which implies the impossibility of its operation: according to the requirements of the Law “On Pawnshops”, the car pawnshop must leave a pledge unit for storage until the moment full debt repayment. However, if the organization also has an MFO license, then the loan can also be issued on the security of PTS.

How does an auto pawnshop work

How does an auto pawnshop work?

Unlike an ordinary pawnshop, which accepts any valuable things as a pledge, issuing a certain amount of money for a certain period of time, during its work the pawnshop accepts cars and motor vehicles in use by the client. The following are accepted as collateral:

  • cars;
  • motorcycles;
  • construction equipment;
  • scooters;
  • jet skis;
  • boats;
  • all-terrain vehicles;
  • ATVs.

That is, you can get money under the PTS or on the security of any equipment, the possession of which is permitted by the laws of the Russian Federation.

Conditions for accepting vehicles

  • A prerequisite is the normal technical condition of the machine. The car or motorcycle must be on the move, have a certain selling value and not require complex repairs in the foreseeable future.
  • All equipment must be properly issued, and the owner must have a Technical Means Passport (PTS) of the established form, registered with the relevant services. If there is no TCP, or its condition is in doubt, then not a single pawnshop will accept the application for consideration.
  • The owner of the car must have an unexpired passport of a citizen of the Russian Federation. It is for this document that a pledge agreement is drawn up, and money is issued.
  • The pawnshop is not interested in credit history, sureties and other documents and additional information.

Advantages of car pawnshop services

With the advent of car pawnshops, vehicle owners were able to quickly solve temporary financial problems. The speed of approval of the transaction and the simplicity of its execution are the key advantages of specialized organizations:

  • the amount in full in most cases is issued on the day the contract is signed;
  • the decision is made in a few hours;
  • the client receives money in a convenient form – cash, transfer to a card, account.

The second most important advantage is the availability of pawnshop services. They do not check clients for reliability, financial security, do not require attracting guarantors. To get a loan, it is enough to have an identity card, keys and documents for the car – evidence of ownership, registration certificate.

The equipment is located in the parking lot of the organization and, if it is reliable, it is guarded around the clock. Often, companies allow owners to make visits to the parking lot to make sure the car is safe. Conscientious car pawnshops who value their customers do not issue a general power of attorney and do not make entries in the vehicle title. Credit history doesn’t matter either – unlike a bank loan.

The most common reasons for contacting car pawnshops

  1. If the borrower is refused by the banks.
  2. If you urgently need money. Usually it will take several days or even weeks to get a loan.
  3. If the borrower cannot pay the principal debt to credit institutions.
  4. If there is not enough money for the development of entrepreneurial activity.

How to make a deal?

To make a deal in a car pawnshop, you usually need to go through 4 simple steps.

Stage 1. Search for offers

The first step is to choose the right car pawnshop. If you have a friend who used the service of a particular company and everything went well, listen to his advice. If there are no people who could recommend you work with a certain car pawnshop, we recommend searching the Internet.

It is necessary to carefully familiarize yourself with the companies that provide this service. You should not just search for information on the Internet, but read reviews, view the site, find out all the conditions and compare them.

Secured lending service Credeo.ru offers to compare terms of loans in car pawnshops and choose a credit organization that is suitable in all respects.

Stage 2. Collecting documents

After the choice is made, the required package of documents is collected. The standard package for 99% of car pawnshops is:

  • passport with registration in the city where the transaction is planned
  • driver’s license
  • certificate of registration of the vehicle, PTS
  • Osago policy (in some cases).

Stage 3. Vehicle assessment

An employee of the organization verifies the authenticity of the documents provided and evaluates the vehicle. The cost of the car is taken from open sources (auto ru, avito, core, drive2).

The specialist evaluates the car as follows:

  1. Analyzes the cars of this brand and determines the lower bound of the cost.
  2. Examines your car for flaws. Vehicle improvements, if any, are assessed. All body defects reduce the estimated cost, as do technical faults.
  3. From the received estimate, you get the agreed%.

Many car pawnshops promise a high estimate of the value of the vehicle, however, in fact, the amount is offered below the market value. If you are not satisfied with the amount, then there are two options: try to agree on the required amount on the spot or contact another car pawnshop.

What kind of car can be pledged

  • Important: you have the right to mortgage exclusively your vehicle. A car officially owned, for example, by a spouse, will not be accepted as a pledge, even with a power of attorney.
  • Banks, most often, do not accept those issued by the Russian auto industry.
  • Auto pawnshops work more loyal and sometimes take our “frets” and “Volga”.
  • Cars bought with a car loan can also be pledged
  • If the owner is a close relative, the pledge is possible with a notarized power of attorney
  • Accept cars with state signs of other countries (Armenian, Belarusian)
  • Here it is important to understand the moment that the point is not in the make of the car, but in its liquidity. That is, the car must have at least some demand. Otherwise, it will be difficult for the car pawnshop to realize it in case of non-payment of the debt.

An important point – the car must be legally clean. He must not be pledged by the bank or hijacked

Stage 4. Registration of the transaction

If the applicant is still satisfied with the amount of the assessment, then the parties conclude an agreement and an act of acceptance and delivery of the vehicle. If only TCP is pledged, the contract is not concluded.

It is important to know that the contract states:

  • Vehicle data.
  • Loan amount.
  • Interest rate.
  • Details of both parties.

Before you put a signature in the documents, you must read the written very carefully, since not all organizations are honest with their clients.

How do I get my car back?

It is very simple to do this – you need to pay all the money with interest within the terms specified in the contract. Many car pawnshops allow early payments, allowing you to save on interest, some immediately calculate the entire amount for the term of the contract and require payment only on schedule. Choose the option that suits you and suits your financial situation.

What will happen if you do not comply with obligations to the pawnshop?

If the loan and interest are not paid on time, the pawnshop has the right to impose penalties, take a late payment penalty – their nature and size are determined by agreements. Malicious defaulters can lose their car – the lender stipulates the possibility of re-registering property rights to get their money back.

In case of late payments, the pawnshop cannot sell your car simply by its own decision. There is a specific procedure:

  • debt reminders;
  • collector visits;
  • referral of the case to the court;
  • sale of a car and debt repayment.

The procedure is long and takes a lot of effort, time and nerves. Therefore, realistically assess your capabilities and use the services of a pawnshop only if you are sure of a refund.

Of course, the administration of companies that issue loans secured by a car is also interested in civilized cooperation. If the client has difficulties of a force majeure nature, the contract can be revised, the terms of return changed, etc. To reduce the risk of complications, you need to promptly notify the pawnshop about the difficulties that have arisen, and not try to minimize contacts.

According to the reviews of the majority of car owners who have used the services of a pawnshop on the security of a vehicle PTS, this is a great way to get a fairly large amount of money for temporary use without delays and difficulties. Usually money is issued on the day of receipt of the application, or the next after it. The minimum package of documents and fast loan processing allows you to solve many sudden financial problems.

How to check the reliability of a car pawnshop

In order not to face fraud, you need to carefully check the selected organization:

  • See how long she has been in the market. The longer, the higher the likelihood that the company is reliable and legal – fly-by-night companies, as a rule, close in less than a year.
  • Check if the organization has a website, if there are legal details, detailed terms of transactions, office address.
  • Check the organization’s reviews on forums and other online resources.

In the office, pay attention to how presentable it is, whether there is a sign, equipped workplaces. Call the company in advance and find out the conditions for issuing loans. In the office, ask about them again – if others have told you, the integrity of the institution is questionable. See how competent and polite the employees are, ask them to show you their certificates.

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