Car Title Loans Cut Back In Montana

by Matthew Glans on January 11, 2011

Car title loan providers, like their payday loan cousins, have seen multiple attempts to by local and state officials to cut back the fees and interest rates charged to borrowers. Some legislators and interest groups argue that these loans are predatory and trap borrowers into a cycle of debt. Most recently voters in Montana approved a new measure that limits car title loans to 36 percent interest.

In a new article at, Eli Lehrer from the Center on Finance, Insurance and Real Estate at the Heartland Institute, “quasi defended” these loans arguing in a quote , commenting that car title loans can be less expensive then the alternatives available.


“It isn’t easy to find car title loan defenders who aren’t part of the industry, but Eli Lehrer, national director of the Center on Finance, Insurance and Real Estate, which is part of the Libertarian think tank Heartland Institute, offers what he calls “a quasi-defense of an industry that gets a bad rap.”

“It’s a good way for some people with few assets to get money and, in many cases, can be less expensive than the alternatives,” Lehrer notes, pointing out that credit card companies charge equally high penalties for non-payment. Lehrer says he had a friend who was college-educated but out of work and desperate for money to pay his rent. He took out a car title loan and rolled it over, but eventually paid it back.

“The legitimate alternatives are pawn shops, payday loans (which you have to be employed to get) and loan sharks,” Lehrer writes in an e-mail to “Even against these, I have to say that car title loans don’t stack up all that well. On the other hand, if the alternative is having ‘Fat Tony’ break your legs, a car title loan can be a good way to go.”

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