The LA Times has a three-part series on used car dealers who make a great profit on old cars sold at high interest rates to people who can't afford them, but have little choice.
The mechanics of the business are laid out in the first part, and there is a link to today's followup, with the conclusion to be posted on Thursday. Link -via Metafilter
(Image credit: Lorena Iñiguez Elebee)
In this little-known but fast-growing corner of the auto market, dealers command premium prices for road-worn vehicles and finance the sales at interest rates that can top 30%.
In a kind of financial alchemy, they have found a way to turn clunkers into cash cows and make money off the least creditworthy customers: the millions of Americans who are stuck in low-paying jobs, saddled with debt and unable to qualify for conventional auto loans.
For most of those people, having a car is the only way to stay employed, and they'll accept almost any terms to get one.
Buy Here Pay Here lots sold nearly 2.4 million cars nationwide last year, up from 1.3 million a decade ago, according to CNW Marketing Research.
The mechanics of the business are laid out in the first part, and there is a link to today's followup, with the conclusion to be posted on Thursday. Link -via Metafilter
(Image credit: Lorena Iñiguez Elebee)
I hear violins.
I am broke, but I am not stupid. I buy all my cars second, third, and sometimes fourth hand. They sometimes don't last too long, but I don't pay for interest and I don't have to worry about it getting repoed.
Mind you no one was wearing helmets, not even the infants! :-o
You can also rent-to-own large wheels and tires for your TTN car as well...
The payday loan business is also frightfully usorious.