Cash on wheels: how to hock your car
Car hocking, for instance, is set to grow in popularity as more and more people learn about its short and long-term advantages. It basically entails pawning your vehicle in exchange for cash, with the possibility of buying it back once things return to financial normality. As with any type of loan, however, it’s essential that you get to know all the aspects of the deal before signing the dotted line. So here’s what you need to look after when hocking your car:
How it works
Pretty much like any other pawning procedure. You simply go to a pawnshop and request an evaluation of your vehicle. Make sure you choose a professional pawnbroker (like this one) who specializes in car hocking if you want to get fair appraisals and great deals. The lending company will then make you an offer based on your car’s wholesale value and previous usage. Accepting it means instant access to a decent sum of money that you’ll have to repay in an agreed-upon time frame. If you don’t manage to do so or if you simply choose to forfeit your buy-back option, the car will be considered as having been sold to the pawnbroker.
For the most part it’s pretty straightforward: any car proprietor who can prove his or her ownership of the vehicle in question with a lien-free auto title and government-issued identification. Some companies may also have minimum age requirements or stipulate the need for additional paperwork such as proof of residence and proof of income.
Common hocking options
Depending on the policies of the lending company, there are usually two ways to go about hocking your car. You can opt for a storage clause, which means that your vehicle will be kept in the custody of the pawnbroker until the loan is paid in full. Alternatively, you can choose to hold onto your vehicle and simply cede your car title to the pawnbroker. This means that you’ll still get to keep driving it, but the car’s ownership won’t revert back to you until you’ve finished paying your loan. In such cases, additional car insurance may be required.
Contracts & legalities
Despite being completely safe and legal, hocking your car is still a major financial decision. It is of the utmost importance that you pay close attention to the contract that you’re about to sign before giving your loan the green light. Pawning isn’t subjected to the regular usury laws that govern credit card companies and banks, so you might sometimes find things like ballooning interest rates and strict penalties squeezed in amidst the fine print. For instance, hocking your car with a 3% interest rate might sound like a good deal initially, but if the contract actually stipulates that the interest rate is per month then that means that you’re staring down a staggering 36% interest rate spread out over 1 year. As for penalties, most professional lending companies will let the occasional late payment slide, but some can be very strict about this aspect and will actually take your car away if you blow a single deadline. Finally, the mitigation aspect is important since you’ll want to know exactly what options will be at your disposal on the off chance of things turning sour between the two parties.
Comparison to alternatives
While car hocking isn’t for everyone, it does present a series of advantages when compared to other traditional loan options. For one, it’s really fast. You can be in and out of a pawnbroker’s office within minutes if everything goes smooth, much quicker than it would take to actually sell your used car outright. It’s also impervious to bad credit ratings. Any outstanding debts will not be counted against you when you’re putting down a valuable asset like a car or a motorbike. What’s more, car hocking is a completely private transaction that you can carry out in order to get cash without having to resort to friends and family or going through any complicated loan procedures. Interest levels vary greatly, but they’re still often quite better than the ones afforded by payday loans and other similar emergency options.
In conclusion, car hocking is a smart and efficient solution for anyone who needs access to short-term cash quickly. As with any other loan, getting the money you need is only half the equation, so always keep in mind that you’ll have to eventually repay your debt in one way or another. Still, the ability to get back on your own two feet is definitely something worth doing and investing in.