As title pawning continues to increase in popularity, so does the attention and scrutiny that comes from the U.S. Government. Because the actual title to the car is used as collateral, as insurance for repaying the loan, the U.S. watchdog group, CFPB, has recently put forth their study detailing that the average car title pawn goes for around $700, and the average annual APR rate is set around 300%. This same group also chronicled that 80% of those who pawned their car title, reapply for secondary loans the very same day that they finish paying off the first loan. The CFPB has also talked on car title pawning being an effective alternative to payday loans, considering that consumers who put up the car title in exchange for the loan, can exit the deal if they fail to make payments, with their vehicle being repossessed. Statistically speaking, this watchdog group has cited that roughly only 1 out of 5 cars get repossessed. They also serve as a cheaper alternative to payday loans. Also more people have access to pawning their car title, whereas roughly 90 million Americans live in states that do not offer payday loans.
