I’m not on the line or anything but I recently bought a car. Decided to blow a fat wad last month and pay off half of it. The cars worth 29k and I owe just under 15k.
I forgot a payment on thanksgiving(thought I was on autopay) and got a super threatening phone call about possibilities if I didn’t pay by EOD Friday.
Obviously I paid it because it was my mistake and they even waived the late fee for me. But it got me thinking. Let’s say I said screw you(which I’m not because I value my credit that I worked and continue to work hard to rebuild) and didn’t pay. If they take my car back do I get the positive equity? I couldn’t find much with my lender given that it’s a tiny local credit union.
Purely for educational purposes here.
Edit:
So I’ve read my contract and it simply states that the asset of found in default would be forfeited. That seems criminal Timmy given that I’ve already put nearly $20,000 into US $30,000 vehicle.
In: 9
From my understanding, they don’t sell it unless you’ve missed quite a few payments. And the car isn’t yours yet because you haven’t paid it off. So the repo company essentially would just be taking it back to the owner (bank) for them to decide what to do with it. And because it isn’t yours, you wouldn’t get any money if they did sell it.
It’s a good way to make $ . For example u have a 20k car u sell. They pay 3k before u repo for missed payments then you sell it for 20k again and repeat.. selling to poor irresponsible people
Best bet is to call and talk to the dealer. Most of the time they would rather work with you to keep the car. There is usually a clause in the contract about exactly what will happen. Generally, you’ll get max screwed no matter what. I had an auto body shop and did some repos on the side because it paid well for the time and expenses. A repo usually paid $300-$500 upon delivery. I only did jobs where the dealer kept a second key and I would grab cars at 1am-3am. There is always risk involved when doing a repo. People can be crazy, and it really sucks to show up and not be able to get to the car. The main dealer I did repos for put GPS tracking alarms on all the cars too. If someone tried to block the repo at home, like when parking in a garage, I next tried to take it at their work. If that failed, I watched the tracking and set a flag for whatever grocery store they have visited several times. The next time they go to the store, I get a message and try to grab the car before they are done.
It depends on the state, but some allow the dealer to reassess the vehicle’s value as whatever it will sell for at auction. In some places there is not a clear requirement for the dealer to actually sell the vehicle at auction. Often they can use the auction price they paid for the vehicle. They are also allowed to charge maximum storage rates for extended periods of time and other nonsense that will ensure you do not walk away with anything.
You’d get nothing. The contract you (or anyone) inevitably signs effectively gives them back the car in payment for the debt. What you owe or what it’s worth doesn’t matter they are collecting the asset against the debt.
Read the contract you signed when you got the car. Typically if you default on a set number of payments they will repossess the vehicle and you will get nothing (other than poor credit rating), as per the terms in the contract you signed.
Another way to handle this situation is to finance the whole car, but keep your down payment in the bank and pay extra each month, or even just wait until it is half paid off and then pay the rest off in a chunk. You are correct it is kinda a scam, so if you are worried, keep the cash in your pocket and then stay in control.
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