Business

1998 RANGE ROVER
4.0 SE
starting at $56 9 125

1998 LAND ROVER
DISCOVERY LF
starting at $35,125

of FARMINGTON HILLS

Affiliated with Erhard BMW

38200 Grand River
Just East of Haggerty

(248) 474-9900

• The Largest Land Rover Centre
in Michigan
• Full Service Department —
On Site Test 'Lack
• IT'S A CASUAL, RELAXED
ADVENTURE !

Our CD'S
Don't play
Music,

• Also Featuring Pre-Owned
Land Rovers And Other 4x4s
• Free Service Pickup & Delivery
By Appointment
• Free Service Loaner By Appointment

PLAGSTAR

SM

BANK

Member F.D.I.C.

be Music
to your Ears,

248-33 8-7700 or 248-352-7700
2600 Telegraph , Rd. • Bloomfield Hills • MI 48302

This is a Federal Deposit Insurance Corporation insured account (FDIC). A minimum opening
deposit and balance of $500.00 is required to obtain the stated Annual Percentage Yield.

1/16
1998

*Annual percentage yield when compounded quarterly. Rate is accurate as of
1/16/98. Penalty for early withdrawal from certificate accounts may be assessed.

When someone comes in to borrow
money, pawnshops are mandated to ask
for identification and to take a descrip-
tion of the individual, a description of
each item that's brought in, and a right
thumb print.
Those forms go to the respective city
and state police departments. "They
must be sent out within 48 hours or we
lose our license," said Sharon Gombein.
Pawnshops like Norman's have
become an alternative banking source.
From 93 to 97 percent of the people
who pawn with the Gornbeins get their
merchandise back. For instance, a sales-
man who works on commissions will
come in when there's a bad month and
his car muffler falls off. He'll borrow
$100 and it will cost him $3 a month
in interest. That's the going rate in
Michigan — 3 percent per $100 per
month. Loans are written for six
months, but you can get your merchan-
dise back any time during those six
months.
After that, upscale pawnshops like
Norman's and Southfield's Lew Silver
Diamond Broker will give their cus-
tomers an extra grace period. Norman's
gives an extra month to redeem mer-
chandise.
"We send out a reminder letter," said
Sharon Gornbein. "It is not a legality,
but we choose to do it. If someone
comes in 40, 50 times, I'd much rather
work with them over and above than
lose that customer forever."
Alan Klein, manager/owner of
Diamond Collateral on downtown
Detroit's Washington Boulevard, says,
"The average person may think, 'Great,
then you can sell all of that unredeemed
merchandise.' But when a glut of mer-
chandise comes in, that's not good,
because you want the money to turn. It
is basically the same for any business. If
that money becomes stagnant, you can't
make any money."
And there is certainly more than
enough room for a pawnbroker to make
an honest profit. Stores like Silver's can
comfortably discount out-of-pawn -jew-
elry by as much as 30 to 70 percent
below retail. Why? Because loans are
usually made at a rate of one-third to
one-half the price the broker can expect
to receive for the sale of the item during
the worst of times.
If you're doing the pawning, you will
always get much less than the item is
worth. But if you're looking for a good
buy, obviously, pawnshops could be the
place for you. Brokers need to get their
money out of the deal to free up cash
for more loans.

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