The long and difficult roads traveled by title loan cars

Many people rely on title loans when money is tight, regardless of their infamous predatory nature and high interest rates. However, getting this loan is a bit like playing Russian roulette – and with similar odds. According to a recent PEW studyone in nine title loans results in a repossession, with the titled vehicle eventually going up for auction.

Recently I received a notice that a major title seller was to auction over 500 vehicles. My curiosity got the better of me. Armed with the auction list and a VIN history tool, I decided to take a look at what ends up at these auctions and how they get there.

Extracting the auction list showed a total of 549 vehicles available for sale. Most vehicles were older, had higher mileage, or a combination of both. There were only nine vehicles carrying less than 100,000 miles, representing two percent of the total vehicles available on the race list. The 150,000+ mile group was by far the largest and contained 358 vehicles, representing 65% of the vehicles auctioned. There were also 110 vehicles listed as exempt or with unknown mileage. These vehicles were exempt either because they were over 10 years old or because they had an odometer that was not accessible.


All vehicles are listed with fairly low “buy it now” prices that allow qualified buyers to purchase the vehicles before the auction begins. Securities lending companies are able to set such low prices since the amount these companies have invested in each security is only a fraction of the actual market value. According to the PEW study, most title loans average around $1,000 and the amount loaned is typically less than 25% of the value of the vehicle used as collateral. If a vehicle is repossessed, securities lending companies will set a price that will cover the principal of the loan – and possibly some of the lost interest if the market allows – in order to move the metal quickly. Annual interest rates on these loans can reach 300% and loans can go down to $100. So there are vehicles listed for as low as $200 plus auction fees.

Chevrolet Blazer 1995

A vehicle, a Chevrolet Blazer 1995, currently showing 271,285 miles. Going back to its history, we see it appear at auction in December 2011 with 199,683 miles, then it is sold with a lien attached in February 2013. Since it had nearly 200,000 miles at the time, it is highly unlikely that a traditional lending institution would have taken out a loan for him, which means that loan was almost certainly handled by a subprime lender. The February sale comes during one of the most important months for subprime and ‘Buy Here Pay Here’ dealerships, as many potential customers receive tax returns that may give them enough money for a down payment on a car. new.

Chevrolet Blazer 1995

The owner of the Blazer immediately found himself in deep trouble as he was probably taking out a loan at 30% APR for a vehicle that was only worth its weight in scrap metal. We see three more liens reported on the vehicle, the last of which struck in October this year. The vehicle owner could have taken out several title loans or refinanced his loan, the latter being too expensive to cover. Since the vehicle was not worth more than $300 or $400, they could only have obtained a loan for around $150, which would have cost them double or triple the original amount once interest was added. The owner may have been in a tight spot or the car may have broken down, making default a more affordable proposition. Due to mileage and condition, the next stop for this Blazer is likely a salvage yard.

The majority of vehicles on the list follow a similar pattern: high-mileage domestics between the ages of 10 and 20 with cosmetic damage. However, there are some exceptions, like this 2002Mercedes Benz S500 which shows a last reported mileage figure of 87,000 in September this year.

Mercedes-Benz S500 2002

It started life as a lease in the community of Woodbury, NY in 2001, like many other luxury sedans. A year later it was returned and auctioned off. The next owner kept it for two years and sold it after the 36,000 mile factory warranty ended. The third owner kept it for three years, but lost it on its first trade-in at the end of 2007 with 68,354 miles. The car bounced around Brooklyn for the next few years before finally ending up in Newport News, Va., where its last owner took out a title loan against it in September of that year. It now sits with a failed air suspension and a $1,000 preliminary bid, intended for a “Buy Here, Pay Here” bundle – and quite possibly a third repossession.


The youngest member of the group is a 2013 Dodge Ram 1500 with a V-6 engine and only 39,380 on the odometer. It’s listed with a clear Texas title and a “buy it now” price of $13,000. It may seem like a lot, but his story tells a different story.

Ram 1500 2013

The truck was sold new in early 2013 and its owner only had it for a year before it was scrapped and deemed a total loss at 12,200 miles in February 2014. It was rebuilt and registered in June of the same year and continued to serve its second owner. He had his second crash in July of this year, but passed Texas safety inspection in August. The title lending company lien was reported in September and the truck was repossessed shortly thereafter. The photos show a slightly misaligned rear bumper. Other than that, the truck looks clean and will likely end up at a dealership.

2006 Ford Five Hundred

Sorting by highest mileage gives us an unexpected example: a 2006 Ford Five Hundred which covered 412,983 miles. Its first significant event after purchase was a serious left rear impact accident in 2010. The original owner repaired it and drove it 296,893 miles in February 2013 when it was recovered by a second owner. This purchase shows a reported lien. At nearly 300,000 miles, it must be a subprime loan like our Blazer example above. The story is fairly quiet after this point with standard renewals until the recent repossession. Although the Five Hundred has proven itself so far, it’s almost certain to end up in a salvage yard due to the current mileage.

Most of the other cars I checked on the race list followed a similar path where they spent a few years in the mainstream market before ending up at a subprime dealership. Some of them experience accidents that should leave a mark on them, but there are flaws that allow the title to be washed away. Others live a long time with their first owners before reaching the subprime market. The second and third owners of these vehicles are usually underwater as soon as they purchase the vehicle and title loans only put them further into debt.

[Image credits: Top – Paul Sableman/Flickr/CC BY 2.0; Odometer – The Car Spy/Flickr/CC BY 2.0; Cars – Insurance Auto Auctions, Inc.]

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