Jump to content

Repo - Help me help someone understand


NefertitiX
 Share

Recommended Posts

My fiancé's car was stolen a few months back and it has been in the repair shop since. In the interim, the lean holder somehow deleted his automatic payment setup and he called to reinstate it but they didn't. He found this out a month or so after calling. Now, he's not sure he wants the car back though he has the money for the payments they haven't deducted. They sent a letter saying they were going to repo the car but the missing payments are due to error on their side and I think that can be cleared up. He doesn't understand how a repo will negatively impact him. Now he thinks he'll just buy another car (used) so he won't have a car payment. Can you help me explain the impact of a repo please?

Link to comment
Share on other sites

I would just catch up on the payments and then sell the car. If he doesn't want the payments, just sell it. This could affect him for next 7 years. Believe me, I know. I once let a car go back and it haunted me for what seemed like forever. The lienholder also went to court and got a judgement against me. I ended up paying over $7,000 for a car I didn't even have anymore. The lienholder sold it for peanuts and then I had to pay the difference. Tell your fiance that there are many consequences that he will have to face if he does it.

Link to comment
Share on other sites

The ramifications of a Repo are pretty severe. Not only do you loose the vehicle but they can still make you pay off most of the loan balance. They can't make you pay it all off but they are entitled to go after you for the left over difference.

This may seem confusing so let me lay it out in an example:

--You bought a car for $15,000 on credit. The contract is for the repayment of that amount.

--Over time you have paid it down to $7,000 when you fall behind and it is repossessed by the lender.

--The lender takes the car to an auction house to recoup their losses and it is sold for $1,000.

--The lender can legally come after you for the remaining $6,000!. That's right. Just because they take the car does not mean you are off the hook for the balance of the loan. The contract is for the money lent to you, not for the ownership of the car.

Now this is a simplification of the process. There's more involved such as the lender must give you a copy of the auction sale report showing what they sold the car for, etc. etc. But the basics are in the example.

His case is more complex. Not only is there the lender lien, but there probably is a mechanic's lien on the car as well for the repairs/storage of the car while int he shop. He would be stuck paying that too. I assume fromt he description he did not have full insurance coverage, which would have dealt with the car repairs (and that could be an even bigger problem because the lender probably required it!).

His best option is get it repaired, get the payments caught up, and if he doesn't want the car, sell it to pay off the lien. If he goes the way you describe he wanted he's gonna end up oweing a lot of people a lot more money than he thinks.

Link to comment
Share on other sites

Guest
This topic is now closed to further replies.
 Share

×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.. For more information, please see our Privacy Policy and Terms of Use.