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Offline SiFi

  • Navigator/Serial Killer

  • Joined: Feb 2006

  • Location: Adelaide
http://east-torrens-messenger.whereilive.com.au/news/story/people-turn-to-pawn/

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THREE Porsches and a latest model Toyota are among the luxury cars being pawned by eastern suburbs (in Adelvegas) business people to keep their companies afloat.

Dozens of expensive items, including the cars, boats and plasma TVs, have been taken into Norwood pawnbroker Cash ‘N’ Trade in recent months as collateral in exchange for a money loan.

Cash ‘N’ Trade owner Matthew Fuller said he was servicing a “new breed” of clientele who had overspent and could not get a bank loan due to the economic downturn.

“Business people who hadn’t previously needed money have maxed out their overdrafts and they’re finding it difficult,” Mr Fuller told the Eastern Courier last week.

“Consequently they’re bringing in more expensive items, like Porsches, iPods and that sort of thing, to get some cash flow while waiting for debtors to pay them.

“This is all beneficial for my business but perhaps it’s a sign of harder times.”

The customers are given a loan for about half of what their goods are worth at an interest rate of 15 to 30 per cent but if they fail to repay the money within a month their valuables go on sale.

In the past three months straight cash loans at the Cash ‘N’ Trade had also increased by 15 per cent, particularly “bigger loans” near the $10,000 mark, Mr Fuller said.

He said the majority of his customers were “gainfully employed” but needed short-term finance because of a small default against their name. Other “more disadvantaged” clients sought loans “just to maintain the basics of life”. He said about 40 per cent of people who pawned their valuables never collected them.

“That’s why if someone brings in a $100 TV I’d lend them about $50 because you’ve got to factor in that you’ll probably have to try to sell it.” Pawnbrokers Guild of Australasia chairman Chris Planeta said pawning luxury cars was not the average trend although it “probably did fit” the eastern suburbs clientele. “Perhaps a couple of the big boys might be hitting a financial snag and have to pawn their expensive vehicles,” he said.

Mr Planeta said most pawnbrokers were reporting a downturn in business because people had “nothing of value” to pawn and were turning to money lenders instead. Cash Converters national marketing manager Glenn Donaldson said there had not been any change in the type of products being pawned or in the type of people using their service.

“Our growth has remained modest and we haven’t seen any real change in business because of the current economic situation,” he said.




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