Vehicle repossession is for the most part based on economics. A buyer purchased a car that they can no longer afford, or refuses to make payments on. Lending institutions loan money as a legal binding agreement, and when the agreement is broken and negotiations fail, cars will be retrieved from the original owner. Here is a quick review of the how and why cars are taken back by banks, and other lending institutions. bg avtomobili
12 Steps to Vehicle Repossession and Sale, the Car Repossession Process
- I buy a brand new car from my local auto dealership, and pay no money down, and signed a defined 5 year finance contract with the auto dealer. I lose my job 8 months later due to the economic downturn and layoffs.
- I default on my monthly payments, and the loan company continues to require payments that I cannot, and do not pay.
- After a few notices of failure to pay, the loan company will now inform me that it has begun legal proceedings to take possession of my car.
- I can now try and negotiate with my loan company; if negotiations are unsuccessful the lien company will begin legal actions.
- At this point the bank or lending institution must prove that they have a lien on the care, and the terms of any lending agreement before they can take any further actions. If they can prove this they will ask the courts to grand a levy against the car, and give me the car owner a set time frame to comply with the court order.
- I can now either voluntarily turn the car over, or wait for the repo man to knock on my door, or repossess the car off the street where they find it.
- The car repossession is completed when the collection agent takes possession of the vehicle once it is off my property, and on a tow truck.
At this point the bank is now the legal owner of the repossessed vehicle, and they will begin actions to sell the car. By law which varies from state to state, they will give me a set number of days to when and where the automobile will be put up for sale. This allows me the chance to buy back the car, and pay off any fees.
Car Auction Process
- My car is now repossessed, and will be taken to a lot and held for sale at a public or private car auction.
- The prices for the repossessed vehicles are always set on market value, which depends of the cars condition and not its history.
- Potential buyers now get a chance to inspect the cars and determine if they wish to place a bid.
- Most auction rules require 3 independent bids on the car, and then it is up to the lending institution that repossessed the car to determine if they will let the car go at the highest asking bid.
- If the bid is accepted a form is filled out for the DMV bypassing the original owner.
- The deal is final once the buyers loan is approved.
That is pretty much the car repossession process, and how a bank repo car auction works. There are many more cars filling the lots of lending institutions as economic struggles continue. Upwards of 300 cars a day have flooded one local car auction house recently in Florida, and lenders do not want to hold out and let the value of a vehicle depreciate, or pay long standing storage fees, and they want repossessed cars sold as quickly as possible. If you would like to learn more about how this type of car auctions works you can check out Buy Repo Cars For Sale and get the scoop on how to find quality used cars at auction.
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