Chapter 2, How
you buy a car on credit, putting
it up as collateral, you commit your
new treasure to the repo man then and there. Every auto-finance
contract says something like:
is of the essence. In the event buyer defaults in any payment, seller
shall have the right to declare all amounts due and payable and the
right to repossess the property wherever the same may be found with
free right of entry, and to sell the same at public or private sale.
Buyer shall remain liable for any deficiency."
“deficiency” means, in addition to losing the car, you still owe
the dollar difference between what the auctioneer can get for it
(often at a rigged price) and the balance on your loan.
probably signed the loan at your auto dealer, but now it is held by
some bank or loan company.
surrender your car in advance of the insult of repossesion. That's
It is just as damaging to your credit rating as an involuntary one,
no matter what you may have been told. The benefit of voluntary
repossession is that there is no repossession fee, which can be $500
or more, to be paid from the proceeds of the sale of the car.
repo man's main challenge is finding your car. Once tracked down,
it's gone in sixty seconds. The actions of the repo man are
an auto thief with a license to steal. Occasionally a repo man is
mistaken for a prowling thief and shot at. The repo man can search
and seize without notice and without a court order and has free right
of entry to your private property, short of breaking in.
extraordinary privileges that strain the Constitution to its limits
and get challenged often in the courts and legislatures. You or your
lawyer may want to challenge the legality of a seizure. The repo man
cannot enter your locked garage. So your best defense may be to
secure your car there and walk. If you take the car out for a ride,
the repo man may try to grab it after you park it in the street. A
determined repo man will follow you to where you are going, using
several cars to make it more difficult for you to know you are being
followed. (The TV series Repo
Men: Stealing for a
features live-action repossessions and shows you how the repo man
borrow from a bank or finance company, independently of a dealer,
using the car as the collateral, as with an auto loan, seizure
becomes difficult. Unless put up as collateral, movable possessions
(cars, boats, RV's, airplanes) are difficult for a creditor to
repossess without obtaining from a court a writ
which is almost never granted. If you must get an auto loan, a
trusted bank or credit union is better than an auto dealer. If it
comes to repo, a bank may conduct the process more ethically, but
don’t bet your car on it.
on your auto loan, you may get telephone-dunned within days after
missing only one payment. The “buy here, pay here” dealers are
even quicker; their collectors get on the phone the day after one
payment is missed. If you're in some temporary trouble, and still
have the slightest credibility, you may find the lender all too eager
to renegotiate the loan. This is to his advantage and your loss.
Repossession is a headache for most loan-holders, who will out-source
the dirty work. Most would rather write for you an extended loan,
even though you may be upside-down on your rapidly depreciating
with the collector,
but don't sign another loan. Also don't confide anything about your
driving habits that could facilitate a repo. There are finance
companies who enforce the contract to the letter, because they are
hot for the profits to be had in repossessions, especially by
the decision to execute is finally made, you won't be told, and
progress from dunning to repo can be surprisingly quick. Then, your
only defense is to elude. Most
repo's are executed by the lien-holder,
that is, the auto dealer, bank, or finance company listed on your
title. A less common instance is a seizure by a creditor with a
judgement who can get a lien on your car. In this instance, you have
a strategy. The economics of a lien-holder repossession are much more
creditor-friendly than those of a judgment creditor. In
dealer-arranged financing, the lender and the dealer may have a side
arrangement that, if the car is repossessed before a certain number
of payments are made, the dealer will pay off the loan and take over
the debt. This is called recourse,
and you, the borrower, will not be told if your loan is a recourse
loan or what the recourse terms are. Your only defense then is to
lock the car in a garage and walk. Judgment creditors have no such
your own liens. You
can protect your car from repo by a non-lien-holder, a judgement
creditor, by placing your own liens on the car. The official
lien-holder then becomes just one among maybe several entities with a
lien on your car.
When threatened with a repo, load your car up with
other liens that you control. One debtor got a loan from his dog and
put the dog's name, Howard, on his car’s title as a lien-holder. No
sane creditor will repossess a car with more than one lien on it. A
debtor who is behind on car payments is often “upside-down;"
he owes more than the car is worth, with just one lien. With two
liens he is not only upside down, but inside-out. Get a friend, a
relative, or your dog, to give you a loan, and secure it with a lien
on your car.
Copyright © 2012 by George Trinkaus and
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