It’s not about money per se, it’s about fast money," is how pawnbroker bernd wolf sums up the advantages of his credit offer. For more than 15 years, the qualified industrial engineer has been running a used car dealership as well as a car pawnshop in offenbach.
From the outside, there is no indication that cars can be exchanged for money within a few minutes. The website is also restrained.
For those who need cash in the short term but don’t want to take out a loan with a bank can bring valuable items to the pawnshop. The promise: a fast and unbureaucratic loan. Unlike traditional banks, wolf and his colleagues have no credit check and no questions asked.
Conventional pawnbrokers mainly pawn gold jewelry, explains wolfgang schedl, managing director of the central association of the german pawnbroking trade. Customers are currently benefiting from the higher gold price. Pawnbrokers offer something unique, schedl says: "they don’t have to pay back the money. In extreme cases they are only liable with their deposit."
Founded in 1950, the central association, headquartered in stuttgart, is the industry association of private pawnbrokers in germany. It represents about 150 companies that operate more than 250 branches. The basis of the business model is the pawnbroking ordinance of 1961. It stipulates that the repayment of the loan may become due at the earliest after three months and four weeks grace period. The interest rate is fixed by law at one percent per month. In addition, there are fees for the appraisal of valuables, their storage and insurance.
In the meantime, it is not only smaller valuables that are being pawned for a short-term loan, but also cars and motorcycles. Electronics are less in demand because their value depreciates quickly. Bernd wolf has specialized in the pawnbroking business with vehicles. He says that mainly self-employed people from the construction and craft trades came to him to make up for short-term defaults or to make investments. "In these industries, it often happens that customers and clients pay too late or not at all," explains wolf.
The industry, which is largely shy of the media, is still fighting against a negative image. Many people are reluctant to go to a pawn shop, says wolf. A good pawnbroker needs absolute calm, discretion and respectability. "He must radiate confidence and take away the customer’s fear of the whore pawnshop."He repeatedly experiences that customers want to explain their problems to him, but he doesn’t want to do that. "Not because we’re not interested, but because it’s simply none of our business," says wolf. The pawnshop alone decides.
Consumer users do not consider the negative impression to be justified. There are currently no such reports or complaints, explains the consumer advice center in saxony: "of course, as in any area, there can be black sheep. However, we are not aware of any examples or case figures in this regard." Consumer users point out the relatively high interest rates and the additional charges. They advise to get an overview of the market and ask for different offers.
The bank’s pawnbrokers are considered systemically important and were also allowed to open during the corona crisis. But contrary to what one might expect, the first months of the pandemic did not see more pledging than before. On the contrary: "there was no consumption, so people said to themselves "i’ll redeem my deposit,"" describes association representative schedl. The consequence: increased numbers of draws and declining numbers of pledges.
After the measures to combat the pandemic were gradually reduced, this trend was reversed, schedl says. "For some time now, we have been experiencing a slight increase in the number of pledges, because the effects of short-time work and unemployment are already making themselves felt." Consumption is on the rise again, the number of pledges as well.
Wolf, the car pawnshop, has so far noticed little of the corona crisis. "We have a different customer structure than conventional pawnbrokers. Many of the self-employed got immediate help, and in the construction sector, people worked through the whole of corona," says owner wolf. "But i suspect something will come at the end of the year."
According to the industry association, almost 95 percent of the pawned items are redeemed, schedl reports: "that’s also good for the pawnbrokers, because they have nothing to gain if the customer is unable to collect his pawn."What is not picked up must be auctioned off – if an amount above the loan sum is obtained, this profit is entitled to the customer.