How Pawn Shops Work

How does a pawnshop work?

People often need to borrow small amounts of money that other lenders are not willing to provide. Auto & Equipment Pawn lends money on items of value ranging from gold and diamond jewelry to musical instruments, televisions, tools, household items, etc. Typically, loans are small, averaging between $70 and $100. They can be as small as $10 or as high as several thousand dollars, depending on the value of the collateral. The contracted loan period is 4 months in California, with a 15 day grace period, and can be renewed or redeemed at any time. All fees are regulated by the state.

Sometimes a customer prefers to sell their property or trade it for an item for sale in our shop. We offer more money in this case, because we do not have to provide storage for the item while it is in pawn.Return to Questions

How do you determine a loan amount?

Our professional staff bases pawn loan amounts on the value of your item—its current appraised value, its current condition and our ability to sell the item. We use all the research tools we have at our disposal to determine an item’s value and get you the most money we can. The amount of the loan offered is based on the wholesale, resale/secondhand value of the item, not the new price. Return to Questions

Do I need identification?

The state requires us to use only a state issued drivers license or state photo ID card as identification each time a customer sells or pawns an item. We also accept US and International Passports and Matrícula Consular id cards. We may know you personally, but that does not exclude you from showing your identification at the time the transaction is made. We are required to check for updated information on every transaction. A complete description of the customer and all items received by a pawnbroker must be reported to the police, who compare pawned and sold property to their burglary, robbery and theft reports. This reduces the chances of a pawnshop receiving stolen property. Return to Questions

What is a Loan Renewal?

If you are unable to pay back your loan in full on its due date, you may get a renewal by paying the interest that has accrued on your loan, and a new loan is written. The principal loan amount remains the same, as does the interest rate, but the due date is reset for the full loan term. Return to Questions

What is a Loan Redemption?

When you are ready to pick up your merchandise, simply return to Auto & Equipment Pawn with your loan receipt and pay off your loan including principal, interest and any fees. Return to Questions

What is the foreclosure procedure?

A customer defaults on a loan by not paying a loan in full or the interest charges due, by the contracted date. After a 15 day grace period, the collateral becomes the property of the pawn shop and can be sold. Return to Questions

Can a pawnshop sell my pawned item?

The title and ownership of an item remains with the borrower until the loan defaults. A pawnbroker is not able to sell a pawned item until the borrower fails to redeem or renew a loan at the end of the contracted period. Return to Questions

Do most customers lose their merchandise?

On average, 80%+ percent of all Auto & Equipment Pawn loans are repaid. Repeat customers make up much of our business. Some customers borrow against the same items regularly. If the borrower chooses not to repay the loan and interest charges, we must try to recover our investment from the item left in pawn. Auto & Equipment Pawn very much prefers that customers return for their property. Return to Questions

Do Pawnshops deal in stolen merchandise?

Despite what you see on TV or in the movies, pawnshops are the worst place to get rid of stolen merchandise. Pawnshops are tightly regulated and work very closely with local and federal law enforcement agencies. Everything pawned or sold to us is described in detail along with the required information from the customer’s identification, in mandatory daily reports to the police. Our video surveillance equipment also verifies customers’ identities. Return to Questions

Does Auto & Equipment Pawn deal in firearms?

Auto & Equipment Pawn does not loan on nor sell firearms. Return to Questions

Are pawnshops regulated?

Yes. States have regulated the pawn industry for decades, and most pawnbrokers are licensed and regulated by local authorities as well. We are subject to laws such as Truth In Lending Act, Equal Credit Opportunity Act, Fair Credit Reporting Act, Patriot Act, and Federal Trade Commission Rules on Data Privacy and Security Transfer. At the federal level, we are regulated by the Federal Trade Commission (FTC), Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and the Treasury Department. Return to Questions

Do I have to remember when my loan is due?

No. Auto & Equipment Pawn sends out a courtesy reminder notice to all its loan customers at the end of their 4 moth loan term. This reminder provides our customers an additional 15 days to come in and redeem their item, or, if they wish to conserve some of their cash, just pay the interest and fees and have another 4 months to pay back the original amount borrowed. Return to Questions