Where The Credit Still Flows

Judging by the volume of ads I’m seeing for CashPoint during the Ravens-Dolphins game, at least one segment of the credit market hasn’t entirely shut down. Indeed, they’re quite eager to lend you money. The way it works is that you go to one of their offices with your car, your car title, and a spare set of car-keys. You need to own the car free and clear. Then they appraise the car, and offer you a loan with no credit check for some total amount of principle that’s less than half the car’s appraised value, and a high interest rate but not quite so high as a payday loan.

Thus, as a lender, you’ve hit upon a risk-free way to make money. In the worst-case scenario, your customer pays back the loan with interest in a timely manner and you make a little money. Alternatively, maybe the customer just never makes a payment and you’ve basically bought a used car for 50 percent off. Or they could make regular interest payments and offer you a steady stream of income. Or they could make payments for a while, and then default letting you repo the car. All in all, a pretty nifty business model. And if you pretend not to know anything about actual human behavior, you could even see all these innovative ways to get into debt as a good thing!