Dos and Don’ts of Pawning Your Vehicle at a Car Pawn Shop

car pawn shop

If you need same-day access to capital, consider these dos and don’ts of pawning your own vehicle at a car pawn shop.

Pawning a fully-paid vehicle is a quick way to raise funds. But, as with all types of financing, there are questions around costs, timing, qualifying criteria and the pawn process itself.

Dos of pawning your vehicle

1. Know how the pawn-a-car process works

In order to release the equity in your car, you must hand it over as collateral.

The funds you can borrow are dependent upon the assessed value of the car.

Once the capital has been re-paid according to the contractual terms, the vehicle is returned to you.

If you’re not prepared to be without your car, this type of loan arrangement is not for you.

2. Have documents to support your application

Car pawn shops only process applications supported by key documents. The vehicle’s original registration papers, a copy of your ID and proof of residence are requested as a matter of course.

In some cases, you may have to demonstrate you have the income to repay the monthly loan instalments.

At Crown Auto Pawn, we don’t conduct affordability assessments or credit checks. Neither do we request bank statements or proof of income.

3. Find a reputable finance provider

In recent years, the number of car pawn shops and micro-lenders in the UK has mushroomed.

Many of these “loan providers” offer dodgy deals characterised by hidden fees and sky-high interest rates.

To avoid being scammed, use an accredited company that has a physical presence, not just online. That way, you’re assured of FCA-compliant interest rates and transparent loan agreements.

4. Read the small print

Before you sign a pawn-a-car agreement, make sure you read and understand the terms. If you’re unsure about anything, ask for clarification.

Factors like loan extensions, early-settlement penalties, initiation and admin fees, and interest rates should be covered in the agreement.

If these factors aren’t included, take your business elsewhere.

Don’ts of pawning your vehicle

1. Don’t forget to clean the car

The amount you get for pawning your car is determined by its make, model, mileage and condition.

A clean, freshly polished and well-maintained vehicle with a good service record will raise more at the pawn shop and on the pre-owned vehicle market.

2. Avoid pawn-and-drive schemes

Pawn-and-drive schemes may seem like an ideal solution but they’re fraught with danger.

This type of lender typically expects the vehicle’s ownership to be signed over. Some even charge a monthly rental for allowing you to drive your own car.

That extra cost is over and above the loan initiation fees, monthly admin fees and higher-than-usual interest rates. What’s more, you may be expected to buy your car back at the end of the loan term.

3. Don’t expect the car’s full resale value

Car pawn shops very rarely, if ever, offer the full resale value of a car as a short-term loan. At best, you can expect a percentage of the vehicle’s appraised value on the second-hand market.

At Crown Auto Pawn, we’re completely transparent about the value of the loan we can provide against your car.

We make an initial offer over the phone, at the first point of contact. Once the vehicle has been assessed at the Crown Auto Pawn branch, a second, formal offer of a loan is verbally made, which you can accept or reject.

Until an agreement is reached and a contract drawn up and signed by both parties, you’re under no legal obligation to accept our offer.

How Crown Auto Pawn can help

Crown Auto Pawn offers same-day loans against fully paid-up vehicles.

With Crown Auto Pawn, you can use a car, lorry, truck or motorbike that’s in your name to secure a loan quickly and easily, with no delays or laborious paperwork.

For more information, call us on 0333 344 8507 or simply complete and submit our online application form.

Complete an application now

APR & Loan Repayment Period

Average representative APR 68.3% and 6 months loan.

Renewals

If you wish to renew the loan at the end of the loan period, if we agree and pay you off the interest you can renew the contract immediately.

Collection

All payments are made via EFT or at the end of the loan period.

Representative APR 68.3%

REPRESENTATIVE EXAMPLE

AMOUNT OF CREDIT
DURATION OF AGREEMENT
RATE OF INTEREST
TOTAL AMOUNT REPAYABLE
AMOUNT OF CREDIT

£10,000

DURATION OF AGREEMENT

6 months

RATE OF INTEREST

60% (Fixed) P.A.

TOTAL AMOUNT REPAYABLE

£13,000 (In one instalment)

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