No credit checks..

[jmomcc]

I was walking through the gritty but slowly gentrifying downtown core of the southern Ontario city that I live in with a friend today. We saw literally 7 different payday loan places. We were talking about how exploitative they are and she mentioned something that I was only tangentially aware of - no credit check car loans. I had heard the ads on the radio but I always buy cars used and in cash so I never had any direct contact even with a regular car loan.

According to her, the dealerships are able to approve anyone by charging usurious rates and overcharging for the car. When someone can't make a payment, they use the inbuilt gps to find it and repo it. It can't be that simple, can it? It seems like a foolproof way to make money. The car is a tangible thing that can be repossessed unlike a payday loan that can become a bad debt.

Can this be applied to other products that would be easier to stock? Laptops for the start of the school year? Tablets?

Also, it seems like an obvious business for someone with deep pockets to get into. Anyone have any experience in this area?

 

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[grindmode]

I was walking through the gritty but slowly gentrifying downtown core of the southern Ontario city that I live in with a friend today. We saw literally 7 different payday loan places. We were talking about how exploitative they are and she mentioned something that I was only tangentially aware of - no credit check car loans. I had heard the ads on the radio but I always buy cars used and in cash so I never had any direct contact even with a regular car loan.

According to her, the dealerships are able to approve anyone by charging usurious rates and overcharging for the car. When someone can't make a payment, they use the inbuilt gps to find it and repo it. It can't be that simple, can it? It seems like a foolproof way to make money. The car is a tangible thing that can be repossessed unlike a payday loan that can become a bad debt.

Can this be applied to other products that would be easier to stock? Laptops for the start of the school year? Tablets?

Also, it seems like an obvious business for someone with deep pockets to get into. Anyone have any experience in this area?

Every notice why lower income area's have an abundance of pawn shops, liquor stores, buy here pay here car lots, Boost Mobile wireless stores, Title loan companies, etc...

Is it wrong to make money off those who are struggling in poverty? Morally that's your call and I've said it before I think big cigarette companies knowing killing people while they are dumb enough to keep buying cancer sticks should be illegal or immoral but BUSINESS IS BUSINESS...

 

[Vigilante]

This model has been around for 30 years. Check out the Fingerhut catalog

 

[grindmode]

This model has been around for 30 years. Check out the Fingerhut catalog

lol or QVC for folks social security or disability making 4 easy payments for that new hot revolutionary "buns and thigh toning" nerf covered spring called a piece of exercise equipment...

 

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[jmomcc]

Every notice why lower income area's have an abundance of pawn shops, liquor stores, buy here pay here car lots, Boost Mobile wireless stores, Title loan companies, etc...

Is it wrong to make money off those who are struggling in poverty? Morally that's your call and I've said it before I think big cigarette companies knowing killing people while they are dumb enough to keep buying cancer sticks should be illegal or immoral but BUSINESS IS BUSINESS...

I couldn't do it, I think. I'm just not ruthless enough. I also have zero industry knowledge and no value to add so there is that as well. It is a facscinating industry though.

 

[Waspy]

This sounds like a business which really adds value.

Make sure you keep us up to date with all the sidewalkers you exploit.

 

[jmomcc]

This sounds like a business which really adds value.

Make sure you keep us up to date with all the sidewalkers you exploit.

I guess I should edit the first post. I'm not actually planning to get into this. I just find it interesting.

It does add value in the sense that if it didn't exist, the space would be filled by organized crime.

 

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[wade1mil]

View attachment 14115
new hot revolutionary "buns and thigh toning" nerf covered spring

So I wasted my money

 

[grindmode]

So I wasted my money

If it made you feel "warm and fuzzy" inside... then it was 100% worth it

 

[grindmode]

This sounds like a business which really adds value.

Make sure you keep us up to date with all the sidewalkers you exploit.

I never mentioned working or starting this type of business....YET I would enjoy the adrenaline rush and roll of the dice on having a fugitive go on the run from my bail bond business or enjoy sneaking through the ghetto's with my STEALTH truck with a "sneaker lift" such as.....

View: https://www.youtube.com/watch?v=V9XVA2rvNek


It's not just those who APPEAR poor or live in the ghetto's that don't pay their bills.. Don't pay your bills while owing on an item = THEFT sorry pal.

 

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[wade1mil]

If it made you feel "warm and fuzzy" inside... then it was 100% worth it

Wait, you're supposed to use it?

 

[grindmode]

Wait, you're supposed to use it?

Jane Fonda (is that her name...?) and the whole buns of steel infomercials in the 80's was when I was still marinating inside my dad waiting to swim.

 

[Waspy]

It's not just those who APPEAR poor or live in the ghetto's that don't pay their bills.. Don't pay your bills while owing on an item = THEFT sorry pal.

The repo business is (for the most part) a genuine business filling a genuine need.

A business which hands out credit without doing any checks knowing they will be repo'ing the car in a few months (as per the OP) is irresponsible, predatory and down right scummy TBH.

 

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[grindmode]

The repo business is (for the most part) a genuine business filling a genuine need.

A business which hands out credit without doing any checks knowing they will be repo'ing the car in a few months (as per the OP) is irresponsible, predatory and down right scummy TBH.

Exactly, one step even further is "selling the shovels" to the repo men aka skiptkace agent specializing in everything from repos to finding fugitives without having to leave your home.

 

[MidwestLandlord]

This sounds like a business which really adds value.

Make sure you keep us up to date with all the sidewalkers you exploit.

The state I live in just passed a law to cap interest rates on these types of things. Put every single payday loan place out of business. 1900 people lost their jobs. They expect the homeless rate to skyrocket. They expect the courts to be clogged with massive amounts of eviction proceedings.

One of my locations serves the "takes payday loans" level of sidewalkers, and I'm down almost 30%

People I've known for years come into my location crying, literally, about how they have no money.

So I personally would never operate a business that preys on the poorest of the poor and charges them outrageous interest rates. But it could be argued that they do provide a service and value for those that need it.

Should they charge these kinds of rates? No. Should people be more accountable and not need payday loans in the first place? Of course.

But how do you knock down that house of cards without chaos?

No easy answers for sure. All I know is that it's been pretty heartbreaking to watch some of my 10 year + customers go from "getting by" to "living in their car"

And not just because it damages my business, but because I genuinely care for my customers as people.

It's a complicated issue.

 

[ljean]

A buddy of mine's dad started a "buy here pay here" car sales business. I think the collection losses ultimately exceeded the profits. Repo'd vehicles are rarely in good shape when you find them. I think one of them even ended up in a lake.

 

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[Scot]

This is a moral grey zone. I personally think anyone who is in business to prey upon the financially illiterate and impoverished deserve a special place in hell. Fingerhut is a good example, as mentioned above.

But also, you take into example @MidwestLandlord's example.

Are there good businesses that cater to the poor? Definitely. Discount bakeries, thrift shops, scratch and dent stores. But charging 30% interest on a payday loan.. nope.

 

[dbjennings]

Read Hillbilly Elegy by JD Vance. It's a very interesting take on the socioeconomic state of lower class whites in America from a guy who grew up in that environment before joining the Marines and graduating from Yale law school. He makes some interesting points about the need for these payday loan places. I think predatory lending is wrong, but there is risk in these loans. Therefore, the rates will be much higher than at a bank. There is room for some nuanced discussion on this subject.
FYI - not a business I've ever been involved in.


Sent from my iPad using Tapatalk

 

[ljean]

The reason those places charge 30% is because the collection loss is so high. You are lucky to net half that rate.

 

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[grindmode]

This is a moral grey zone. I personally think anyone who is in business to prey upon the financially illiterate and impoverished deserve a special place in hell. Fingerhut is a good example, as mentioned above.

But also, you take into example @MidwestLandlord's example.

Are there good businesses that cater to the poor? Definitely. Discount bakeries, thrift shops, scratch and dent stores. But charging 30% interest on a payday loan.. nope.

Out of curiosity what do you think about things such as the whole "Ford Pinto" scandal or the housing boom... Business is DOG EAT DOG...

I understand your point but at the same time IMO signing some ignorant middle class soccer mom into a MLM scheme is just as dirty...

 

[MidwestLandlord]

Business is DOG EAT DOG...

It is?

The deals I've made in my life that have been the most profitable...were a win-win.

EVERY. SINGLE. TIME.

Let's go back to my example of high interest loans.

All those people that can't access that service now. It's a bad deal.

But hey! Those people were willing to pay it, right? Dog eat dog world after all...

Now the government stepped in and said "Enough of your bullshit" and put them out of business with the stroke of a pen.

Hmm...

Was it because the premise of the business was a win-lose to begin with?

 

[grindmode]

It is?

The deals I've made in my life that have been the most profitable...were a win-win.

EVERY. SINGLE. TIME.

Let's go back to my example of high interest loans.

All those people that can't access that service now. It's a bad deal.

But hey! Those people were willing to pay it, right? Dog eat dog world after all...

Now the government stepped in and said "Enough of your bullshit" and put them out of business with the stroke of a pen.

Hmm...

Was it because the premise of the business was a win-lose to begin with?

I am not trying to justify that "it's the right thing to do OR that I would exploit people in need for profits earned myself"... I'm talking in general about business... Sure, people like YOU and majority of people HERE seek business deals where one is not giving the other the shaft for ANY circumstance/reason... Just as I'm sure you are a great landlord and I think slum lords are filth...

Those big banks preyed on the poor and they got slapped on the wrist C'mon... I'm not debating or trying to prove any point rather this posting from my perspective is WHAT IS MORAL? Selling high interest used cars to people who statically will default and end up costing the dealership money chasing them down... after ALL the bullshit they are I would suspect not making much more than I dealership selling to someone in a higher income bracket... People who have shitty credit and can't consistently make payments is unfornuate but they NEED cars also... someone fill's that market need.

Again, I am not on one side or another but BUSINESS IS DIRTY... Maybe not "business idea's or people here" but let's think about place's like FoxConn... That sweet shiny new iPhone or smartphone everyone is in love with in made in a factor WITH SUICIDE NETS, F*cking SUICIDE NETS, to catch the miserable overwork slave labor... BUSINESS IS DIRTY.

I have no further to say.

 

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[Scot]

Out of curiosity what do you think about things such as the whole "Ford Pinto" scandal or the housing boom... Business is DOG EAT DOG...

I understand your point but at the same time IMO signing some ignorant middle class soccer mom into a MLM scheme is just as dirty...

People will always go into business to serve themselves while doing a disservice to others. That's never going to end.

But thankfully, with my generation we see businesses that function to help people. Look at businesses like Toms, Warby Parker, AirBnB who all devote money and time to helping.

I'm not saying your business needs to be a charity, but if your business succeeds by hurting people, you suck (I was trying to think of a better way to say that but, yeah, they suck.)

 

[MidwestLandlord]

I am not trying to justify that "it's the right thing to do OR that I would exploit people in need for profits earned myself"... I'm talking in general about business... Sure, people like YOU and majority of people HERE seek business deals where one is not giving the other the shaft for ANY circumstance/reason... Just as I'm sure you are a great landlord and I think slum lords are filth...

Those big banks preyed on the poor and they got slapped on the wrist C'mon... I'm not debating or trying to prove any point rather this posting from my perspective is WHAT IS MORAL? Selling high interest used cars to people who statically will default and end up costing the dealership money chasing them down... after ALL the bullshit they are I would suspect not making much more than I dealership selling to someone in a higher income bracket... People who have shitty credit and can't consistently make payments is unfornuate but they NEED cars also... someone fill's that market need.

Again, I am not on one side or another but BUSINESS IS DIRTY... Maybe not "business idea's or people here" but let's think about place's like FoxConn... That sweet shiny new iPhone or smartphone everyone is in love with in made in a factor WITH SUICIDE NETS, F*cking SUICIDE NETS, to catch the miserable overwork slave labor... BUSINESS IS DIRTY.

I have no further to say.

I do have something further to say.

You're missing the point.

The point was, businesses that enter into win-lose deals tend to get what they have coming to them.

Read up on Ford's current Kuga (pinto) recall in South Africa. Has cost Ford $500 million and counting.

Housing crisis? Derivatives that were too heavy on risk. A win-lose that turned into a lose-lose (for everybody)

So to answer the OP's question, I would never do something like this because it is not a win-win.

Now I have nothing further to say.

 

[grindmode]

People will always go into business to serve themselves while doing a disservice to others. That's never going to end.

But thankfully, with my generation we see businesses that function to help people. Look at businesses like Toms, Warby Parker, AirBnB who all devote money and time to helping.

I'm not saying your business needs to be a charity, but if your business succeeds by hurting people, you suck (I was trying to think of a better way to say that but, yeah, they suck.)

EXACTLY... in an ideal world this would be the standard and no child would go to bed hungry... It's part of the whole fast line idea of creating "VALUE" which personally I have no clue what I'm doing but am volunteering my time currently to someone working to help them as that is what I truly think is key to a business I want to start, creating value not selling snake oil and that's why I am on this forum as we all are after sifted through rivers of snake oil self help guru sites/info...



@MidwestLandlord That escalated quickly lol just kidding I completely understand and now time group hug. no homo

 

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[G-Man]

Jeez that all escalated quickly.

In our low point we were going to a bunch of these "fintech" companies for loans, and that thing will go into flames pretty soon. I can rationalize the high cost of capital, because they're basically loaning without the normal due diligence of a bank, but the repayment structure, good lawd. It's basically geared to put the borrower onto a hamster wheel like payday loans. First time we have a mini recession, that whole industry is going to implode.

If anybody figures out a low cost way to short that market LMK

 

[Utopia]

This is a moral grey zone. I personally think anyone who is in business to prey upon the financially illiterate and impoverished deserve a special place in hell. Fingerhut is a good example, as mentioned above.

But also, you take into example @MidwestLandlord's example.

Are there good businesses that cater to the poor? Definitely. Discount bakeries, thrift shops, scratch and dent stores. But charging 30% interest on a payday loan.. nope.

This happens everywhere though and something I have been thinking about lately.

If you go to the airport in some foreign countries, the prices of the meals can range from $15-20. I know for a fact that the added value of burger king shouldn't be $5 a hamburger, but the airport makes it so and they prey on other's need for the food.

Companies do this with warranties in the hope that you will be 'stupid' enough to buy and then they will not have to pay. They choose statistically chosen dates outside of when it actually breaks and sets their warranty term for the safe period.

The airplanes play on your NEED for a flight and fluctuate the prices based on when they can get you for the most money. An airline like Spirit will also try to upsell you on everything possible to make more money in this way.

Is all this moral or immoral? I don't know. I know that it doesn't make me feel good if I were to sell something to someone else and I think they are worse of for my doing so. But this is the nature of many, many businesses.

There are "life coaches" right now selling fake webinars, getting UpWork contractors to write all of their content, and are subjectively (in my eyes) providing little value to the people who they are "serving". But value just is that. It is subjective. What one person deems valuable is different from what another person deems valuable. So while I think smoking is F*cking dumb and should be outlawed, there are millions that would fight me for that privilege so that they can pay money to destroy themselves. Is it right or wrong? Maybe it's just humanity.

 

[JAJT]

Payday loan places fall on both sides of the moral coin for me.

On one hand, it's a fair deal. You want a high risk loan this very second? I take the risk. You pay me back. Fair deal. Hell most of these places even charge pretty damn reasonable loans if you pay back on time ($300 for $20 is pretty common around here, that's less than 10% interest).

On the other hand, they only work because of really poor choices by the people with good intentions who don't understand what they are doing. These loans are marketed as emergency funds to help get you through a temporary problem but what they really are is a way for you to artificially increase your paycheck-to-paycheck lifestyle by $300 more than you make.

So what happens when you give someone who lives paycheck to paycheck $300? No, I'll give you a second to think about this. Give up? They spend it. Every time. Oh but they can't really pay it back because (again, shock, gasp) they didn't make $300 more this month than they did last month. So they are short and pay what they can but it's not $300. Maybe it's $50 because they cut back somewhere knowing they had this extra bill. Well now they owe $250, plus the initial $20, plus that less than 10% interest rate just went up to 20% for being delinquent. They now are paying back less than the interest they owe and the amount gets larger every month.

They will never pay this off. You simply can't "cut back" your way out of this debt. It's around this time when the poor suckers grab a pencil and calculator and realize their income - bills = less than the interest they owe on the loan, and they haven't even added in groceries yet.

So while the capitalist in me says "it's a good service that offers value and a fair deal on high risk individuals" the human in me says ""

 

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[eliquid]

Its easier to repo a car sitting outside in public at night with a GPS in it, than a laptop that could be hidden anywhere inside someone's home.

For things outside of cars, you pretty much need to charge as much as possible on the down payment and first month's installment to cover the unit.

 

[OldFaithful]

STEALTH truck with a "sneaker lift"

That is one sweet tow truck. Wow. I had to watch a couple other vids with that model too!

I had a friend with a towing service many years ago and I've ridden along a couple times, but he wasn't in the repo business.