By on October 14, 2011
“You didn’t have the decency to knock on the door! I have your 200 in cash.”

There are three key ingredients with most repossessions. Don’t pay. Don’t tell the truth. Don’t return calls. In the case of this former customer, the check that was ‘in the mail’ and the phone that didn’t work had suddenly transformed themselves  into ‘cash money in hand’ and 27 phone calls right after the vehicle got taken back.

Most car dealers absolutely hate to take cars back. They want the money. They want the customer to be happy and recommend their business. Along with this, they don’t want to spend all the money reconditioning a vehicle back to retail form.

Reconditioning vehicles is an expensive process when it comes to repossessions. You have dented panels that either need to be repaired or replaced. Paint work. Mechanical issues aplenty. On average you’re usually looking anywhere between $500 to $1500 between the moment the repo is authorized to the 20 to 30 day time period when the vehicle is back on your lot.

That’s a major deficit compared to the $250 to $450 monthly surplus you can get by having a customer that simply tells you the truth. Contrary to modern fables, most dealerships and finance companies want to make things work. Life happens and if it’s a medical emergency or a shortened work week,  invariably you’ll deal with someone who has been there, done that, heard it hundreds of times in the past.

They will work with you. I will work with you. Just tell the truth… and don’t drive around uninsured.

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38 Comments on “Hammer Time: Repo Etiquette...”

  • avatar
    Shane Rimmer

    My scumbag of a brother suckered me into cosigning a loan for him. He did all of the above, but had my name and credit to fall back on to get out of trouble. I ended up loaning him the money to pay of the truck when the bank started talking lawsuits and theft by conversion (he hid the truck), so now I am the one he won’t work with and won’t return any calls.

    What Mr. Lang said about the lender wanting to work with you is absolute truth, though. The bank tried everything they could to work out payment arrangements with my brother before the repo crew was sent out.

    I know you all know this, but never, ever, ever, cosign a car loan.

    • 0 avatar

      I cosigned a small car loan with a girlfriend once. She was late a few times with payments after we separated, and I was prepared to pay off the loan once I got the nastygrams from the bank.

      Unlike your brother, she was pretty responsible and did eventually pay off the loan herself. We should have redone the loan when we separated, but she said she’d take care of it and I trusted her.

      Wouldn’t recommend it to anyone, though.

    • 0 avatar

      How about cosigning an extremely expensive higher education loan for an EX-girlfriend?

      No, it wasn’t me. It was a friend of mine. Poor mug, he’ll have that following him around forever.

    • 0 avatar

      Sometimes there’s a lot of expense attached to getting someone out of your life cleanly, without any desire for future contact. If you never see him again, it was probably worth it.

    • 0 avatar

      A friend of mine’s sister, who at one time was a pretty decent person, got involved with a huge(in size and loserdumb)guy, and after 10 years and 2 kids, decided she had enough of the bad boy lifestyle (Biker buddies, oxycontin/percocet/vicodin/pot heads, bailing hubby out of jail for fighting and/or DUIs, and getting slapped around when money is tight and hubby is drunk)and left him. She and the kids moved in with another sister for a while, and she almost immediately wrecked her old car and needed something to drive. So, my friend, being the nice guy with good credit that he is, co-signed for a 3 year old Caravan for her. She made a few payments and then decided to stop paying them. My friend had no idea until he go a letter from the bank. He makes the 3 payments, and tries to find sis. Well, sis has a new BF, who makes the ex look like a catch, and he finally finds her, with her two little kids, shacked up with the new loser, and high on what’s probably meth. He took the kids “to get ice cream”, called the cops on them and she didn’t get arrested, but he did, and after it was all said and done, my friend has a Caravan now, his sane sister has custody of the two kids, and the bad sister is now a full blown methhead, complete with rotten teeth, living in a trailer with another loser she seems to attract like a flame does moths. She constantly whines about getting her kids back, but that’s unlikely as her teeth Before she went “bad”, she was really nice looking, but now…YIKES! My friend swears he will never co-sign anything for anyone ever again, even for his own kids.

  • avatar

    I’ve seen people who didn’t realize that the bank could come after them if the person they co-signed for defaulted. They apparently thought co-signing was like vouching for someone.

  • avatar

    That is one of the best pics ever posted on TTAC.

  • avatar

    I’m amazed that people can not pay for something and then act surprised/offended/victimized when that something disappears.

    You told the nice man that you’d pay him $XYZ per month for the car. You then stopped paying him anything for the car. Really, what did you expect to happen?

    • 0 avatar

      Have you been paying attention to the news the past few years? Politicians run on people’s belief that they don’t need to pay for things once they’ve taken possession.

    • 0 avatar

      My ex works for a health insurer and she’s represented by the UAW. Her mortgage company offered her a very attractive refinancing but it was a special offer for union members and she needed a union official to sign her application, verifying that she was a union member.

      When she went down to her local, the union’s financial secretary agreed to sign the form but she asked my ex why she was refinancing and proceeded to tell her:

      “I stopped paying my mortgage. Then, when the finance company sold the foreclosed property, my sister bought the house for only $6,000 and sold it to me. People shouldn’t have to pay mortgages.”

      My ex was appalled.

      “People shouldn’t have to pay mortgages”. No wonder those children “occupying” Wall Street think they shouldn’t have to pay back their student loans.

  • avatar

    Pay for your car or Operation Repo will come and take it. Do you really want to be seen with five 400 lb guys in your yard?

  • avatar

    My carpool driver’s TR7 got repossessed once on a dark winter night. They live down a long, dark gravel easement road. By the time they got to the door and realized what had happened the little sports car was down the road. (The repo dudes were lucky the Triumph started and ran, but that’s another Lucas story.) Her husband jumped into their Bronco to follow them but found that the repo guys had thoughtfully pulled the headlight wires.

    They must have made it right with the lender though, because they were driving the TR7 again the next week.

    • 0 avatar

      Remarkable story on all fronts! The TR7 starting and the owner wanting it back are both unusual occurances. If ever there were a car ripe for a strategic loan default, it was the TR7.

  • avatar
    bumpy ii

    “Most car dealers absolutely hate to take cars back. They want the money.”

    My folks bought a year-old ’92 Corolla that was said to be a post-divorce repossession. Are new car dealers more likely to take the car back if it’s something they can flip easily?

  • avatar

    Heh. I strategically defaulted on my ’87 Audi 5000 after the warranty expired and it began grinding up its third transmission. When everything worked it was a great drive, but that was rare. I even walked the keys out to the guys when they showed up. Good riddance.

    • 0 avatar

      A neighbor leased a Ford Escort GT wagon. The lease was much longer than the car’s useful life, but the credit company wouldn’t pick it up no matter how long the bills went unpaid. Considering that the guy had replaced it with a new BMW and that he bought a vacation waterfront home as well as moving his primary residence to a bigger house in our neighborhood in the next few years, I guess it didn’t do too much harm to his credit.

  • avatar

    I knew someone who had their car repo’d once, and I don’t think it troubled the dealer a bit. He was clueless, and his family’s advice was counter productive. His step father wanted him to have an American car, and he already had bad credit due to a series of self destructive acts. Since he needed a cosigner and his cosigner wanted him to buy a GM or Ford vehicle, he wound up looking at a used Chevy Cavalier wagon. This happens to have been on the used car lot of the very new car dealership I worked for in college, although I’d long since quit. The dealer didn’t even require the cosigner that he’d expected, the one that kept him from getting a credit union loan to buy an E30 I’d found for him for half the price. Perhaps they didn’t want a cosigner because his down payment exceeded what the wagon cost them at auction. I couldn’t believe he’d agreed to pay $10K for this used Cavalier for which I wouldn’t have paid the $2K he’d put down.

    Long story short? The loan lasted (YEARS)longer than the car did. Loss of use of the car meant he lost his job, or at least went from working constantly to sporadically. The car was repo’d. The dealer took it to auction without even hosing it off and it sold for hundreds of dollars, validating my estimate of its worth. The dealer got a judgement against my carless and jobless friend for the difference between the agreed sale price and the auction price and various penalties. The dealer went from having an $1,800 Cavalier to having a note for $10K plus $800 from selling the car at auction with zero prep. I don’t think they minded the repo work, or that they expected any other outcome from selling that car for that price.

    • 0 avatar

      As I understand it, there is a huge difference between states (like KY) where “a deal is a deal” and states (like MI) where there is a concept called “merchantability” that I just looked up on wikipedia: “An implied warranty of merchantability is a warranty implied by law that goods are reasonably fit for the general purpose for which they are sold.”

      The difference is that if a dealer sells someone a car, they have to keep making the payments — but if the car stops running, they may be able to claim that the car was no good in the first place, voiding the contract. I like it, and the Cavalier story above is a good illustration why. Just because someone is an idiot and irresponsible should not put them into indentured service. From what I’ve been reading, Steve makes good money from a successful BHPH deal — but he also makes sure the car stays running and the customer stays happy. That’s not just OK, that’s a public service.

      In a perfect world, any finance contract would stipulate that the item financed can be returned in lieu of payment at any time. That would put a swift end to all the B.S. that has plagued us for the past decade; no-income loans, zero-down mortgages, rolling in negative equity, 72-month car loans etc.

      I realize it’s not practicable, since a car — or even a house, with a little effort — may be thorougly trashed after 2 years, and worth nothing. But it’s nice to dream…

    • 0 avatar

      I saw that once myself. They sold this mentally handicapped woman a 2002 Kia SUV that bluebooked at $2000 for $10000 at 25% interest. They stuck a GPS/ignition killswitch on the thing and just waited for the inevitable default.

      It makes me suspect that some car dealers keep one total dog of a car in the back and wait for the people who have SUCKER written on their forehead. My question is who the hell finances these adventures in supersubprime lending.

      • 0 avatar
        Steven Lang

        I have that one beat. Just google ‘Bill Heard’ enough times and you’ll have your eyebrows fly into the back of your head.

        Of course this is hardly an American phenomena.

        But in other countries it also leads to a better ending.

        Then again, happy endings also can take place in the land of the corporate freeloader and parasite.

      • 0 avatar

        I hate to say it, but I think my old friend is just lacking a diagnosis. He is the world’s only broke male shopaholic. IIRC, he wrecked his credit the second time(could have been the 3rd) by buying a 1954 Chevy sedan. For a couple hundred dollars more, he told me he could have bought a sound 2 door ’55 Chevy with a V8. Instead, he saved the money for fixing up the 4 door, Powerglide, Blue Flame 6, Flinstone sedan. Flinstone because it had no floors. It also had no unperforated external body panels. They were all riddled with rust. In the world of domestic cars, collectibility tends to hinge on having 2 doors, a V8, and a manual transmission, so naturally he avoided all of these qualities. It didn’t stop him from maxing out his credit cards at Year One, buying every bit of NOS trim they had for 1954 Chevy sedans. He was unhindered by having no unrusted bodywork to attach all his fresh blister-packed chrome trim to. Ultimately, he left the thousands of borrowed dollars worth of new trim in the attic of a house he had rented and then go mad when the landlord threw it all away, having meant it the third time he told my friend he was going to toss it all if it wasn’t picked up. But the debt lived on.

  • avatar
    Dave M.

    Jeebus, Steve, I had erased Bill Heard from my mind. Representing several of our ‘taken’ staff members, I sword fought at his Houston dealership numerous times.

  • avatar

    Some of those repo cars and motorcycles make the best deals sometimes. :)

  • avatar

    The lowest price isn’t always the best deal. When people stop paying, they stop caring. I don’t want a sludged up engine or a filthy crusty interior…

  • avatar

    I remember the Bill Heard crash and burn. They deserved it. It seems like every area of the country has one of these scumbag operations where the interest rate is so insane that the person would be better buying a 100 buck beater than to get something better.

    I used to work with a guy who was going through a nasty divorce, and our boss found him a $100 car, a Ford of some kind, a strange metallic green with a wooden bumper. He drove that car for 4 years, and then the battery died. He comes into work one day, all red faced, and we asked him what was wrong, and he goes into a tirade about how his car needed a battery, and that a battery shouldn’t have gone bad after only 4 years (It was new when he got the car). We all laughed. A battery and a few oil changes, one tire, for four years? We knew at that point, he was crazy. His web page proves it. It’s a real trip.

  • avatar
    gator marco

    One of my room mates in college was in a down cycle. He had a big note on a custom van, and fell behind on payments. Of course, he went through the various stages of promising a check to making up sob stories to finally ignoring phone messages and bill collection mail.
    Late one evening the repo guys took the van from right outside. The repo guys called from a convenience store around the corner from the apartment complex; we had quite a bit of scuba dive equipment in the van, and the repo guys were concerned with moving the 2 tanks (both were empty.) The repo guys were very nice about letting us take all our gear out of the van before thay drove it off. My buddy ended up declaring bankruptcy to get out of the loan balance, along with some other debts.
    I can imagine that inventorying and storing personal stuff from people’s cars must make the whole repo deal distasteful for all concerned.

  • avatar

    I work for a financial institution, and what Steve says is 100% TRUE.

    As I tell folks all the time: “We don’t want your car. We just want your money.”

    I have lots of repo stories, but the best was the ex-NFL player who jumped into his Bentley ON THE REPO TRUCK and wouldn’t get out. He had strung us out for almost a year.

    We ended up losing about $50K on that POS.

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