As a consumer it is always important to understand the laws that apply to being a borrower and buying a vehicle on payments. Auto repossession is something that no consumer thinks will ever apply to them, however there are tragedies and changes in employment and income earning ability that can happen very unexpectedly, leaving the consumer without the ability to make a car payment and resulting in a possible auto repossession.
The first step in protecting yourself both now and in the future from auto repossession is to read and completely understand your purchase and financing agreement with the seller. This means taking the time to read all the fine print on the sales contact and financing documents. If you don't understand a particular clause or item, ask about the issue or ask to take the document to your attorney for information. No reputable dealership will have a problem with a legal professional looking over the sales or financing information. If the company seems unwilling to do so, find a different dealership or individual.
The second important factor is to understand under what conditions the lender will start the auto repossession process. How many payments have to be missed before your vehicle will be repossessed? Know what the laws are in your state regarding the rights that you have as a consumer and the right the repossession companies and their agents have. In most states the vehicle can be seized anywhere in public, which may mean your business or employment area parking lot, a shopping mall, movie theatre or any other public parking space. In some states the vehicle may also be subject to auto repossession on your property provided it is not in a locked area or garage.
If the vehicle has been repossessed, you have fewer options to deal with the problem than working with the lender prior to the seizure of the car. If you find yourself unable to make a payment, call the lender and try to work something out, especially if you have corrected the financial issue that is preventing you from making the payment. If you have lost your job but have found another and are missing a pay period due to the transition, your lender will typically work with you to either add a payment on to the end of the loan or accept a partial payment and additional balance payment with the next monthly loan installment. You may be charged a service fee but this is a small price to pay to keep your vehicle and prevent the negative impact of an auto repossession on your credit score.
The auto repossession business is a very lucrative industry. The business is based on a healthy market for creditors who do not wish to be responsible for the physical act of repossessing vehicles. The industry yields over a billion dollars yearly although of the general public has very little knowledge about the auto repossession business. There are thousands of these small and large repossession firms in business in the United States. Most of the operators in the auto repossession business are not listed in the phone book and do little to no advertising as the abundance of business does not make it necessary. The operators usually just directly contact specific creditors that are in need of the services.
The auto repossession business is a great money maker for several reasons:
• There is a lot of work available during any economic cycle.
• In comparison to the actual time needed to perform a repossession the fees charged are high. Generally, fifteen to thirty minutes is all it takes to perform repossession. The repossession will usually yield a profit around 200 dollars or more.
• Creditors will usually use the same auto repossession business repeatedly due to the abundance of business. A reputable auto repossession business may at times have more business than it can handle.
To obtain a better understanding of the auto repossession business, it is important to understand why and how the repossession is given to an independent agency. Most companies that enlist the services of an agency in the auto repossession business don’t want to have the additional task of actually repossessing an automobile. Often times before a vehicle is repossessed some investigative work must be done. This research is usually needed to locate the subject of the repossession or the subject’s vehicle. Since some people will try to hide the vehicle to avoid repossession, this is a critical component or the success of the repossession effort.
The auto repossession business can be a hectic one. However by law the actual repossession must be done in a peaceful way. Most people get rather upset when the repo man comes to seize their automobile; because of this a lot of repossessions are performed at night or at the owner’s place of employment without their knowledge. Repossession done in this manner usually is peaceful due to the lack of the owner’s knowledge that their car is being seized. Before the auto is repossessed the agent attempting to seize the car will make sure they have the right car and this is done by matching the VIN number they have to the one in the automobile. The person repossessing the car will most often notify the police what has occurred to avoid any problems if the owner reports the auto stolen.
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