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(Cleveland Plain Dealer)   If you want to stop your truck from being repossessed by trying to drive it off the boom of the repo man's tow truck, don't   ( divider line
    More: Fail, tow trucks  
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9360 clicks; posted to Main » on 08 Mar 2013 at 1:58 PM (4 years ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»

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2013-03-08 07:07:02 PM  
Car dealers might push you into buying a vehicle you can't afford, but when the holder of the loan is forced to repo your vehicle, they LOSE money. They don't want people to default on their car loan for that very reason. With the mortgage-lending crisis, they mostly didn't care if you made your payments or not. At least, they didn't care until it all came crashing down.

I notice a lot of people get taken by used car lots around here.  We bought a vehicle just last month and we started a search with a fairly new big used car lot that has been catching a lot of popularity, Suski's.  We went in and got to looking and talking with the salesperson.  Seemed fine at first, but what got me was their was no picking out the vehicle, discussing price of the vehicle or discussing the price of trade-in.  Instead they wanted financial information (I regret going that far) and the type vehicle we wanted.  Then a financial officer in another room started deciding what vehicle for what payment he will get us into.  We are not talking vehicles that are anywhere near their warranties anymore, but he said the best he could do was about $300+ per month payment.  I realized I have no idea what vehicle he was talking about for what total money.  We left, politely.  We went to the dealership where we bought our van and went to the wholesale lot, for a much better deal.  I picked the vehicle, found out how much trade-in before finances were discussed.  We got exactly what we wanted and by help from a good friend, we payed off the truck free and clear after only a few weeks.  Our friend floated the loan and we were able to pay him off way early.  Anyway, naive people get taken a lot and you can spot the people that are really trusting and let someone else decide whether they will sink or swim.  Suski's surprisingly moves a lot of cars which means their are a lot suckers.  I think I just got their name.  Hank Graff is pretty good dealership, but stay on your guard.

/I like Repo Games, I root for the people that look like they got suckered by a salesman.
//Suski's = suck it.
2013-03-08 08:47:50 PM  
So this isnt turning into an Op repo thread?
2013-03-08 09:28:22 PM  

Oldiron_79: So this isnt turning into an Op repo thread?

Needs to be a JJ the Repo Man thread....

/fun starts at 3:45
2013-03-08 10:03:00 PM  
Yeah... good luck collecting damages Mr Repoman.
2013-03-09 02:00:53 AM  

spmkk: Huh? Why would the customer give the lender a single red cent after the car is repossessed? The lender has already recouped 100% of the collateral plus whatever payments were made before default...what makes you think the customer owes the lender anything more?

I think you need to re-read what you wrote:

ZAZ: Best case, the lender sells the car for $5,000 to an associated business. The remaining balance on the loan is $15,000. Lender collects that from the borrower and is now even on paper.

So even though your original assertion was that customers will pay for the deficiency balance on the unit, we both now agree that that never happens. Good.

spmkk: The lender has already recouped 100% of the collateral

Ah HAHAHAHAHAHAHA! The car gets auctioned off after it's inspected to the highest bidder. It rarely meets the blue book value of the unit, and it even less frequently pays off the loan balance.

spmkk: to explain how or why? Used cars don't depreciate all that fast. Auction fees aren't all that high, and are usually the buyer's responsibility anyway. Defaults usually don't happen early on, so generally a substantial portion of the car loan has already been repaid by the time the car is re-appropriated.

Our portfolio was 75% new cars. And if the borrower never pays the deficiency balance on the unit, why would they pay the repo fees or the auction fees? The lender just ends up eating those costs.

And as far as "defaults usually happen early on," so long as the loan amount is greater than the value of the unit, it's "early on." I kinda think you don't know how interest works, and how long it takes to pay down the principal balance. If you get a 60 month loan for $15,000 at 13% (typical for less than perfect credit or a first time car buyer), you end up spending almost $5500 in interest over the lifetime of the loan. And since a new car really does depreciate 30% when you drive it off the lot, it'll take you 18 months just to get to the value of the unit when you took it home, and of course by then it's depreciated even further. And then we add on the repo fees and the auction fees and the balance is even higher. And finally, customers with shiatty credit with terrible loan terms often DO default early on because they're shiatty borrowers. That's why their cars get repoed after only 27 days past due, whereas with the prime portfolio we don't repo until at least 60 DPD, and we'll even go as high as 100 DPD if the customer keeps in contact with us and has made good on prior payment arrangements.

spmkk: note that selling cars at auction is 100% the lender's choice. There is nothing stopping them from putting their cars up on Craigslist like the rest of us, or selling them on consignment via used-car dealerships -- or buying dealerships outright if they're repo-ing enough cars.

Actually, lenders are required by law to sell units at auction because it is the best way for them to guarantee they received the highest price possible on the unit. They MUST make every effort to get the highest price possible for the debtor, and the best way to do that is with a third party auction in which the potential buyers (usually dealers) don't know who the lender is.

spmkk: Either way, a claim of an average loss at all -- all the more so an average loss of $4,500 -- definitely fails the smell test without a bit of explanation.

Not really. Repossessing cars is expensive, and the lender ends up eating the repo fee, all auction fees, and the deficiency balance on the unit. Seriously, lenders DO NOT WANT to repo cars. They just do it because otherwise they end up eating the entire loan balance to charge off rather than just the deficiency balance.

I worked in collections/vendor management for 9 years. I was a collector, then a collections data analyst, then a repo vendor data analyst. For 9 years I lived, breathed, ate, and shiat collections and repo statistics. Believe me when I say the average loss on a repossessed unit is $4500.
2013-03-09 05:48:29 AM  
Was there a camera crew and was the operator of the wrecker spouting off ridiculously over the top southernisms?
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