When you find yourself in a tight spot financially, instead of relying on mainstream lenders such as banks, it can be worth looking into other options.
Pawning your car could be a useful alternative if you don’t need it on a daily basis and you aren’t reliant on having your own transport, as it’s a simple way of releasing equity on your vehicle without actually having to sell it.
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What is pawning a car?
A pawnbroker will offer you a short-term secured loan using your vehicle as collateral, agreeing a time period in which you can repay the money, including interest. It works in the same way as if you pawn any other item such as jewellery, watches, power tools or gaming consoles. However, because a vehicle is a more valuable prestige item, you can borrow more money, depending on its market value.
Once the customer has repaid their loan over an agreed period, they can collect their vehicle again and the pawn agreement comes to an end.
Some people may choose to sell their item outright to the pawn shop if they no longer want it, as it’s a faster way of getting cash compared with selling a vehicle privately, which can take weeks and often involves dealing with time-wasters and “tyre-kickers”.
What are the benefits of pawning my car?
Loans of up to £200,000 are available, depending on how much your car is worth, so if you own a rare or prestige model, it’s a way of borrowing a considerable sum if required. If you have a financial emergency, the cash can be paid out in as little as two hours once the loan is agreed.
As well as being a faster process compared with applying for a loan from a traditional source, such as a bank or building society, it can also suit borrowers who have a poor credit history and struggle to be approved for finance as a result.
There are no early settlement penalties, so if you’re in a position to settle early, you’ll pay less. There are no credit checks and no hidden fees, so the maximum loan amount, depending on your vehicle’s value, is guaranteed. You can release the equity on your car without having to actually sell it, which benefits collectors for whom a car is a treasured possession, rather than just a means of transport.
As with any other personal financial transaction, confidentiality is assured and your vehicle will be stored safely and securely until the loan is repaid and you can collect it again.
Pawning your car is a UK-wide service and you will be dealing with friendly and professional advisors who can answer all your questions.
Should I pawn my car?
As with any loan application, it’s important to fully understand the terms of the transaction and decide whether this type of borrowing is right for you before going ahead. If you’re looking for a way to release the money from your vehicle without actually having to sell it, pawning could be something to consider.
When you need extra financial help quickly, whether it’s for business commitments, personal reasons such as home improvements, or simply for everyday life, you may contemplate selling your car to get the funds you need. However, selling isn’t the only option, so you won’t ever have to be cornered into accepting a vastly reduced offer from a private buyer just because you need money fast. If you choose to pawn your car, it will be stored away at a secure location until you repay the loan.
Pawnbroking enables quick access to cash and flexibility, so you won’t be at the mercy of buyers on online auction and sales sites. The pawn shop will tell you exactly how much cash you’ll receive and when, so there’s no uncertainty involved, making it perfect for high value vehicles.
Once you’ve made your decision to go ahead, the application process is simple and trained advisors will help you through every step of the way.
Are there any risks of pawning a car?
As with any decision to borrow money, it’s important to assess the affordability of the loan repayments before committing, as there are risks if you’re unable to meet the repayment terms.
Should you be unable to stick to the stipulations of the loan, within the agreed timeframe, the pawnbroker can keep your car and put it on sale to other customers to recoup their loss.
If you’re considering borrowing by using your vehicle as security, Pawnmy allows clients to release maximum equity against their most treasured possessions, thanks to our extensive experience in the asset finance sector, specialising in luxury cars.
Reach out to our team to discuss the details further and we will provide information on how to release the equity in your vehicle to potentially provide a financial lifeline.
