Beep... beep... beep... beep... beep... beep... beep... beep... beep... beep... beep...Beep... beep... beep... beep... beep... beep... beep... beep... beep... beep... beep...
It's irritating, huh? You're telling me! Anyway... Happy beep day!
Today is what I call "beep day". The beeping (about one beep every 3 seconds) comes from a device attached to my car for my convenience. It lets me know my payment is 2 days late. There is a little numeric keypad under my steering wheel, and if I punch the six digit code in the beeping will stop. I have to make the payment to get the code.
This isn't a "car payment" in the traditional sense. I own(ed) the car. I had the pink slip. That's sort of the problem. This is something called a "title loan". You sign over (and physically hand over) the title to your car as collateral for the loan.
I realize it's my fault. I can read. I signed a contract that had 586% at the top of it in large, bold letters. I had seen the ads for these loans and I knew it would be bad, I just didn't know it would be this bad. So in my financial maneuverings of the time I kept that in the back of my mind as an option, and by the time I went to the place and actually got the details on the thing it was too late. By that time I was in such a rut that I had no choice.
The loan. Most people are familiar with payday cash advance loans. This is set up like that. Calculated as APR, it's 500 or 600 percent. Of course, there's a disclosure you sign that has the rate on it, and the terms. In my state, there's even a paragraph
in bold, warning the consumer that this type of loan is meant to meet a one-time, short-term financial need and that it should NOT be used on a long-term basis.
-Thanks Democrats in my state. Sternly worded as usual. Dig the bold type too. Keep up the good work!
But as everyone who has ever taken one of these payday loans out knows, when that next payday comes it's hard not to re-loan. And if you happen to be living in a time of your life where you are struggling financially (which you probably are since you were desperate enough to go sign a piece of paper that says 586% at the top of it in big, bold numbers), you do it over and over and over. You go write a check for $300 and get the next loan for $255. The limits are different in different states, usually $250 to $500.
What it becomes is a payment. In my state the limit is $255. For a $255 loan you pay $45 every two weeks ($97.50 a month, $1170 a year) to rent your own money. It's financial crack.
Well, a title loan is basically like taking a built-in payday advance loan every two weeks for the amount of the payment. This payment is mostly interest, so paying something over and above the amount of the payment (which is difficult since the payment is every 2 weeks anyway) is the only way to pay it down. If you were to make only the payments, it would last forever.
Day one: Payment is due (every 2 weeks)
Day two: red light on keypad starts flashing.
Day three (beep day): red light on keypad starts flashing and beeping.
Day four: car ignition is disabled.
The next step is that they come and repo your car I guess. I've been to day 9 or 10 (=5 days with my car disabled) but I was in contact with them and promised a late payment and paid when I said I would. Just some hefty penalties and some more interest. May I please have another couple o' hundred percent, Sir?
Thank you, Sir.
Once I punch the code in the car will turn on again (or stop flashing or flashing/beeping, depending on what day I am on). In 2 weeks when the next payment due, the process starts again.
Like I said, I can read and I fully understood the terms of the loan before I signed. It's my own fault and I take full responsibility, but the guy was just too convincing. I wanted to be happy too. Oh yeah!
Not really. I don't live in that state. I found the place I found thru the toobs. It was just a stark black on red site with the toll-free number and a few pictures of happy people with hands full of money. I was desperately behind on everything and that money looked good. It was good. I lived it up, I saved my apartment and had gas and food and everything that month!
Beep... beep... beep... beep... beep... beep... beep... beep... beep... beep... beep...Beep... beep... beep... beep... beep... beep... beep... beep... beep... beep... beep...
Of course, they spend some of my money to lobby and run ads during election time to ensure that their business model is not outlawed. They want to remind you that if we rid ourselves of their service, you (and your precious little pets ) will probably die.
Yes, die. You and your precious little pets. Watch it and listen closely to dear Aunt Mattie's tragic story. I shit you not:
This Friday I will FINALLY be able to pay off the balance of this loan and get that stupid beeping &*#@^# off of my car. I guess one way to look at it is that I learned a lesson and that I won't ever get involved in another loan like that. I guess all I can do is hope that I am never that desperate again.