When you need money urgently, selling your luxury possessions might be the first thing that comes to mind. However, solving immediate cashflow problems by pawning your assets is a way of keeping them, rather than losing them forever.
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You can release their value in the form of a secured loan, while retaining ownership as long as you keep up with the repayments.
Research by the National Pawnbrokers’ Association shows that 30% of people in the UK will consider pawning their goods as a viable option.
Car pawning has been around since the early 1900s, when few people owned a motor vehicle, and they were considered a luxury item. Since the 1950s, when more of the population had cars, it has become more commonplace. Today, it’s a thriving industry, and with good reason.
Should I pawn my vehicle?
Pawnbroking is a convenient way to access quick cash by leveraging assets. Choosing pawnbroking over selling outright has many advantages, not least of which is having immediate access to your cash.
Once you decide to pawn, vehicle loans can be approved and processed the same day, sometimes in as little as two hours. Once the paperwork is signed, the money can be transferred into your account in minutes. This can be much quicker than selling your car, especially if you’re doing so privately and enduring an endless stream of tyre-kickers and barterers.
The most popular reason for securing a loan on your vehicle, including when you pawn a classic car, is being able to retain your assets, rather than saying goodbye to your pride and joy.
Car pawning with poor credit history
You can even be considered for a car loan if you have a poor credit history and CCJs, as long as you’re the legal owner. When you choose auto pawning, car loans are assessed on the vehicle’s value and whether you can repay the loan.
While the lender may collect information from credit reference agencies to help make decisions, this isn’t the sole deciding factor, so every borrower stands a chance of being accepted. Each application is decided on its individual merits.
There are flexible repayment options, with the term of the loan normally lasting for between 18 and 36 months, although there are no penalties for early repayment. On the contrary, you’ll be entitled to an early settlement discount.
All car pawn loans are carried out in complete confidentiality, with the convenience of completing a fast and hassle-free transaction to receive the money when you need it.
Disadvantages of selling
The main disadvantage of selling is that you’ll lose your valuable items forever. Your ownership will end, something that can be difficult to take if you have an asset of sentimental value.
It can also take a long time to sell a car at the right price. Pawning is discreet and fast, while selling means you may be using an online auction site, involving messages and calls from potential buyers, arranging meetings and dealing with possible payment delays. There are no guarantees that your vehicle will sell at all, plus you may be liable to pay auction fees and commissions, which will mean receiving less money in your pocket after the sale.
An auto pawn loan is a viable alternative to a traditional loan, particularly if you need the cash fast, or have a poor credit rating. It’s well worth considering if you have a financial emergency and a high value car.
