5 Common Pawn Shop Myths Surrounding The Industry
I’m sure some of us have heard a number of myths circulating around about pawn shops and how the industry runs its business. These myths can sometimes sound so true and convincing to the point where one gets a bit skeptical which ends up deterring you from using your pawnbroker for a quick cash loan. Well if we are being honest, there are pawn shops whose services are not always genuine and honest hence tarnishing the name of other genuine pawn shops. In the business world, you will always find businesses with genuine services and those that are disappointing. With that being said, let’s look at the common pawn shop myths spread around about the industry.
Myth 1: Pawn Shops buy and sell stolen items
This is a very common pawn shop myth that tends to be spread around and believed by many about pawn shops. The last thing that pawnbrokers want is to get into trouble for selling stolen items. As a matter of fact, pawn shops work with the police which may come as a surprise to many. They work closely with them to stop crime and catch thieves. Pawn Shops go through a list of stolen items and compare serial numbers before purchasing any product. If you want to pawn an item, pawn shops normally take down your name, phone number and address for security purposes. Lastly, pawn shops are also not allowed to sell any items they buy until a waiting period of about two weeks has passed. This is to ensure the police have had enough time to find out whether an item was stolen or not.
Myth 2: The Pawn Shop industry is unregulated
People assume pawn shops can do whatever they want. This couldn’t be further from the truth. The pawn shop industry carries out their business in a highly regulated industry. Most pawn brokers are required to be licensed at a state or local level. The federal laws that regulate the pawn industry are Patriotic Act, Truth in Lending Act and Equal Credit Opportunity Act. Pawn shops that deal with firearms are regulated by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).
Myth 3: Pawn Shops have high interest rates
Many pawn shops offer secured loans. Secured loans is a loan where the borrower pledges their asset as collateral for the loan, in this case your valuable item i.e car, boat, caravan etc. If you fail to pay the loan, the pawnbroker keeps your item as payment. Now because of this, interest rates tend to be lower. It is important to note that interest rates are determined by the amount of loan you want to take out and the risk involved. When you get a lawn from a pawn shop, it’s usually for a small amount of money and for a short period of time.
Not to mention, a borrower is only permitted to obtain a loan that is the financial equivalent of their collateral so as to ensure the borrower isn’t overwhelmed with payments.Ensure you check the interest rates available at the local pawn shops around where you are. At Hock Your Ride, we do offer the best interest rates you can get.
Myth 4: Pawn Shops want to keep your goods
This is also one of those pawn shop myths that couldn’t be further from the truth. The fact is that it is the pawn shop’s best interest that a borrower pays back the loan. This is because they will receive the item’s cost plus interest. Most people who use pawn shops to secure a loan are normally repeat customers meaning that they always get their items back. Also when a borrower hasn’t repaid the loan, the pawnbroker calls them at least twice to remind them. When a loan isn’t paid it costs the pawn shop time and money trying to resell the item.
Myth 5: Pawn Shops Sell Old Outdated items
Many people fear buying from pawn shops because they assume that they only sell old and used stuff that people don’t want. When you visit a pawn shop, you will be surprised to find brand new items like electronics and even motorhomes that are in great condition. Remember, that pawn shops only buy used items that are in excellent working condition. You will also find all sorts of items from antic pieces to high end products like jewelry at affordable prices.
In conclusion, we hope this article has made you feel more confident in the pawn shop industry.
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