High Repossession and Charge-Off Rates for Auto Loans
Auto loans are being repossessed and charged off at a very high rate. But between the two, the highest percentage is a charge-off without repossession. Many times, a bank will do a write-off or a charge-off if you’re 90 or 120 days delinquent. They call that a non-performing asset, meaning that the loan they have on their books as an asset, meaning it’s worth something, suddenly now is worth nothing to the bank because they’re not receiving any payments. So they have to write it off. The bank is not really in the business.
Why Banks Avoid Repossessing Vehicles
Of repossessing vehicles, sometimes they will use repossession as a way to try to recoup some of their losses. However, in recent years, banks have found that repossession doesn’t really get them that much money. What happens is the vehicles that they repossess very frequently are in poor condition, and they don’t know that in advance. Your car might be just fine and driving in perfect condition, but the vast majority of vehicles that are non-performing loans that are delinquent.
Issues With Repossessed Vehicles and Financial Loss
Not paid for three or six or eight months; there’s something wrong with the car. It might have been crashed, the engine blown, transmission blown, or maybe it was sold to somebody out of state. The banks have to spend about $3,000 per repossession to get the car back. That’s throwing good money after bad. If maybe every third or fourth car is good and three cars are bad, to get a good one, they have now spent $10,000 in repossession fees to get that one good car. It’s not worth it. So, banks don’t want cars; they want money. So we get.
Customers’ Experiences With Bank Repossession
Calls all the time, every single day, dozens of calls from people who say, “I stopped paying my car loan.” Your reading will be back in 8 seconds. In the meantime, remember you have access to live one-on-one consultation and the undivided attention of a licensed, certified expert in this subject and many others. We want to listen to your story, hear your questions, and give you expert advisement on your options. We want to tell you what we know about your situation and what options you have. Now back to your reading. I called the bank to.
Banks Reluctant to Repossess Vehicles
Come get it; they don’t want to come get it. Or I stopped paying it off, and they didn’t try to come get it. Banks are not repossessing cars because they know that the chances are, if they repossess it, they’ll spend another $3,000 out of their pocket to get it. And here’s where that comes from: it’ll cost them about $1,000 to the repo person or company to get the car. Then it’ll cost them another thousand to ship it to where it has to be shipped to—an auction or a holding yard. Then they’ll have to pay auction fees, storage.
Financial Burdens of Repossession
Fees, brokerage fees, and commissions to get that car sold. That’s all them actually writing checks, putting money out of their pocket for a bad car. So, expect that if you stop paying, it’s very likely they won’t come get your car. Now, the lien will still show on your title until you do a lien release. The way you do a lien release is by putting together a package of paperwork requesting that the lienholder remove it from the title because they did a charge-off. Again, this is not something that is very well known, and a lienholder can just ignore it.
Requesting a Lien Release
However, in most cases, a lienholder that gets a vehicle lien release—if they look it up in their system and see it’s a charge-off—if a low-level clerk gets that package, they’re just going to sign it and send it back to you. So always request a lien release. You have a 0% chance of getting a lien release if you don’t do that. You have a pretty significant chance if you do the package. Also, you can enable and be eligible.
Accessing a Court Order Title Process
To do a court order title. If you do a lien release request to a lienholder and they don’t respond, then you have access to a court order title process. Our website will describe those. We now also have consultation available if you would like to discuss it more in detail, more than you can get from reading a website. If you want to talk to a certified title agent, you can click the link and arrange a private consultation about your lien situation with a licensed title agent.
