Car Repossession Loopholes

Car Repossession Loopholes – Are They Even Legal?

by Samuel Gitukui

Many of us buy our cars through loans. This can be a convenient way to acquire the car you’ve been wanting to get your hands on. However, defaulting on payments could also cause the lender to repossess the car. This is why it is important to learn some car repossession loopholes.

First off, this is a double-edged sword. Not only will it take your beloved vehicle away but it will also damage your credit score.

The great thing is that there are steps that you can take to prevent car repossession from happening in the first place. That is of course if you are preemptive instead of reactive.

Let’s find out everything you need to know about car repossession and how you can avoid it from happening to you.

Car Repossession

Car Repossession

When you acquire a vehicle through finance, it is the lender who retains the title and ownership of the car until you have made the full payment.

If you were to default in payment, the lender has the option of repossessing the car and then reselling it at an auction to help recover some or all of his money.

Sometimes you may need to pay the lender any more money you owe which is the difference remaining after the seller has auctioned the car.

Each lender will have its terms as to the period that will be considered the default. For some, this can be several months while for others it can be just 30 days.

This is why you need to read through the loan contract and understand the lender’s default period. You will then be able to tell for yourself if you will be able to meet the terms of the car financing.

The law will also govern the repossession process and this is why you should also familiarize yourself with the respective laws in your state.

Avoiding Repossession

Having the repo man take your car can drastically affect your finances. Having a car is not the same thing as using public means. It is far more convenient and efficient.

For instance, being able to drive quickly to that interview may increase your chances of getting that job.

After having your credit score damaged, you may struggle to get more loans and credit in the future. This is why you need to understand the various car repossession loopholes available to you.

1. Talking With Your Lender

If you are suspecting and thinking that there is a chance you could miss the car payments, the first thing that you need to do is talk to the lender.

One thing you should also note is that car repossession is also going to be an expensive operation for the lender so it is in the best interest of both of you to discuss other better and more effective terms.

Via the talks, you may both consider forbearance or even modifying the payment program.

2. Refinancing The Loan

Another option you may want to consider is taking another loan to pay the current car loan, this is what is called loan refinancing.

After paying off your car loan, you are now left with a clean slate and can now start over under new terms.

One thing to always remember is that you should always avoid defaulting payment. Otherwise, loan refinancing is just a short-term solution to the problem.

The only time therefore that you should consider loan refinancing is if you are sure you will meet the term of the new loan.

3. Reinstating The Loan

Assuming that you have already defaulted in payment and yet the lender has not yet come for the vehicle, another option that you may want to consider is reinstating the loan.

Some lenders may offer this option to help cut down on the costs of repossession.

4. Selling The Car

Selling Car

You may also want to consider selling the car yourself. This would put you in a better chance to get even more money out of the deal than if the lender was to sell the vehicle at an auction.

Sometimes you could even get enough cash to pay off the loan plus a little extra. Furthermore, you may even get enough cash to either clear some other loan or to put up a down payment on a new vehicle.

5. Give Up The Car Voluntarily

Sometimes you may find that you have run out of options and the only one you’ve got is to surrender your vehicle voluntarily. Sure this will still hurt your credit score but not to the extent of if the car was repossessed.

Here you will volunteer yourself to take the car instead of the repo man coming for it.

Another hidden benefit of this is if you owe the lender more than the value of the vehicle. You may be able to negotiate the price to a lower price with the lender.

Repossession Rights

In the majority of states, the repo man can repossess the vehicle without issuing a notice provided they do not do it forcefully or break into the garage where the vehicle is parked.

Some states will even require that the lender inform you of the location and date of the auction to provide you with a chance to rebuy the vehicle.

In other states, you may also reinstate your loan which would allow you to pay the lender’s repossession fees. All the more reason to learn the car repossession loopholes.

If there is a violation of your rights by the lender, then the state will require the lender to compensate you in case of any bodily harm or property damage. You could also use this case against the lender in case they are looking to sue you for any pending amount.

How To Hide Your Car From The Repo Man

With the above in mind, it is clear that you can play your part to ensure that the repo man doesn’t take the car. This is how.

Car Repossession Loopholes, Techniques #1 – Keeping The Car Locked In The Garage

Among the most effective and best ways to keep the car away from the repo man is to ensure that you have locked it inside your garage. The repo man will not attempt to break into your garage to get to your vehicle.

That said keep in mind that if the car is left outside, the repo man can’t take it without violating any laws.

Car Repossession Loopholes, Techniques # 2- Exchange It With A Friend In A Different State

This is one of those dodgy car repossession loopholes to help buy you some time as you get enough cash to offset your loan. Simply have your friend use your car and you use their car.

That said, this doesn’t offer a long-term solution since most companies will have a tracker installed in the vehicle making it simple to locate and repossess.

Car Repossession Loopholes, Techniques #3 – Take Out The GPS Tracker

The repo man often uses a GPS tracker which is installed in the vehicle to locate and repossess the vehicle.

Taking this tracker out helps you hide the vehicle and buys you time before you can pay your loan.

Simply find where the car tracker is and take it out. Next, you will need to change the location of your car to one that is both safe and inaccessible.

Car Repossession Loopholes, Techniques #4 – Park Your Car In A Gated Compound

This is another clever way to keep the car away from the repo man. As long as you have locked the gate, the lender will simply not break into the compound buying you time to pay off the loan.

Car Repossession Loopholes, Techniques #5 – Give Your Car To Your Neighbor

Just like giving the car to a friend in a different state you could also give your car to a neighbor to use. You would then use your neighbor’s car in case you need to drive somewhere.

This will allow you to hide the car and keep it away from the repo man for a while thus buying you time to pay the loan.

Car Repossession Loopholes, Techniques #6 – Selling The Car

If you have recently found yourself in a financial fix and you are struggling to pay off your car loan, then there is a good chance that the repo man is on his way.

One way you can get around this issue is to sell the vehicle and use the money to pay the loan. This will keep you in good standing with your creditors and will not hurt your credit score.

Furthermore, you will be able to avoid the extra costs which come with car repossession. This is one more reason why you need to learn the car repossession loopholes.

Statute Of Limitations On Car Repossession

This is a law that clearly states the maximum time where you can file a claim in a state of law. The statute of limitations on car repossession will depend on the state.

For instance, you may find that in one state the creditor or lender has up to 4 years since the day it repossessed the vehicle to sue for a deficiency. The statute of limitations will have run if the 4 years elapsed.

You may in this case contact the creditor and ask them for a dismissal of the lawsuit. In case they do not do this then you will need to contact an attorney.

1. The Written Contract

Since the contract will be signed, the purchase of a vehicle will be held under the written contract clause of the statute of limitations of each state.

2. The Time Frame

It is on the date of the last activity in the account when the statute of limitations will become effective.

In the majority of cases, this will be the date of the last payment that was made. That said, if you were to enter a new agreement whether it is oral or written, then the statute of limitations will be reset by the debt holder.

3. The Importance Of Understanding The Statute Of Limitations

The debt collector will not be able to file a lawsuit against the debtor when the statute of limitation expires. Note that you will still need to pay your debt. However, the debt collector cannot take any legal action against you.

4. State Limits

The average period of the statute of limitations in most states is 6 days. That state each state will have its specific period.

Ohio as well as Kentucky both have an SoL period of 15 years. Both North and South Carolina will both have 3 years.

Financial Assistance For Car Repossession

The repo man may take your vehicle away from you. This is if it is a security for a loan or if you find it difficult to pay your loan.

The lender may send the repo man after two months of default payment. They could also send the repo man if they think there is a high chance the car could get damaged.

Sure it is your name that is on the car title. But still, it is the lender who holds the title and the car as a mortgage. This simply means that you should never sell the vehicle. That said you can introduce the buyer to the lender in case you found someone who can offer a good deal for the car.

Sure it is not a must for the lender to accept this new turn of events. They may even go ahead to take the vehicle to the auction. If in this case, they get a lower price at the auction, you have the option of stating your case and asking them to reduce the outstanding balance.

Recovering The Loan

Once the lender sends his repo man, he will then try to sell the vehicle to recover the money that he loaned to you. Keep in mind however that often such a sale will not result in prices that will pay the loan in full.

The reasons for this include:

  • There is a cost added on the balance of repossessing the vehicle
  • The value of the car will depreciate over time
  • The interest that’s payable to the date of the sale
  • The price that is received at auction that isn’t the insured value

Remember that you will likely receive notification emails reminding you to pay the due amounts. If you were to ignore such messages and notes, you will likely get a call from the repo man.

Also, note that for the lender to repossess the vehicle from your property they will require a court order. They may also require your written consent.

Let’s say you were to park the vehicle at your place of work or outside of your property. The seller can repossess the car without violating any laws.

Car Repossession Lookup

Many people who have taken a car loan often search out clever ways to keep the repo man from taking the car. The repo man on the other hand has worked through all the tricks and knows how to get around them.

Simply put doing something like locking the vehicle in your garage will only prove to be a temporary solution.

You may wonder how repo companies locate your car in case you decide to go it. There are several ways that they do this. First up they may scan the areas where you are likely to visit each day. And they are not modest in casting a wide net on this one.

The lender will provide the repo man with your home address. This is the first place that the repo man will check. The easiest way that the repo man can repossess your vehicle is when it is on the driveway or on the street.

Keep in mind that just parking your vehicle here and getting in your house opens up the repo man to swoop in and take the vehicle.

Car Repossession Loopholes, How It Works #1 – Extending The Search

Car Search

If the repo man still doesn’t find the vehicle, they might decide to make a sweep further into the neighborhood. Indeed some drivers will park the vehicle further away from their house in an attempt to confuse the repo man.

That said, there have been many instances of vehicles that have been taken by the repo while being parked away from the house.

The repo man may even check the supermarkets or convenience stores around your area.

You may decide to leave that Jeep Cherokee SRT parked in the garage only to have to leave it in the parking lot at your place of work. Don’t be surprised if you find it repossessed when you leave work in the afternoon.

The repo man may also follow you around as you drive. They will maintain a safe distance where you will not be able to notice them. Assume you park the vehicle and maybe get into the restaurant or convenience store. They can then come over and take the vehicle.

Car Repossession Loopholes, How It Works #2 – Repo Man Knows All The Tricks

Nowadays it has gotten even easier to repossess a vehicle. This is because the repo man will often come with towing equipment. This, therefore, means that they don’t have to get inside and drive the vehicle away. They can simply tow it at whichever location including the gas station.

One of the most aggressive ways that one can use to keep your new Audi RS7 away from the repo man is by locking the vehicle in the garage. Some laws vary from state to state regarding how the repo man can handle the situation.

In certain states, the repo man could acquire a duplicate key to your garage which they would then use to access the garage and take the vehicle. Note however that some states would view this as illegal.

For cars that are parked in an unusual spot, the repo man could use an electronic means to trace your SUV even if you think of driving offroad.

Car Repossession Loopholes, How It Works #3 – The Tracking Device

The majority of lenders nowadays will require that the car have a tracking device as long as it is under a loan or a payment plan.

Note that the law will prevent parties from keeping the vehicle away from the repo man and preventing repossession. That said, it is often hard for the repo man to prove such cases.

Car repossession loopholes therefore can help buy you some time before you can get the cash needed to pay the loan.

You may be found guilty if the law can establish that you are keeping the vehicle in a location where it is hard to access or giving it to another person to use in exchange for his or her car.

Let’s assume that the repo man sees you driving out of your home with the vehicle only to find you not using the vehicle and walking on subsequent days. In such a case they could have a case that you intentionally hid the vehicle from the repo man.

Pros And Cons Of Voluntary Repossession

The Pros

1. You Can Save Money

Often if the lender or the repo man takes the vehicle without your willingness then the cost of the towing or repossessing will be yours to bear. By voluntarily surrendering the vehicle you can avoid such costs.

2. More Convenient

With modern technology, the lender can be able to find your vehicle and repossess it. Trying to inhibit the process could result in a lot of stress. By voluntarily giving up your beloved John Cooper Works Clubman, you can avoid plenty of stress and hassle.

3. Lenders Appreciate It

Lenders don’t want to deal with the stress of trying to get the vehicle from you without your willingness or cooperation. They would much rather deal with a simple process. Volunteering in the car would help protect your credit score even if it’s only a little.

The Cons

Voluntary Repossession

1. Hurting Credit Score

Even while you may be able to protect the credit score a bit, voluntary repossession will still hurt the credit score for the most part.

2. You Will Still Need To Pay

If the lender still is not able to recover their full amount they will still require you to pay the remaining debt.

Frequently Asked Questions

How Long Does A Repo Stay On Your Credit

For the vehicle repossession to come off your credit score, it could take up to seven years. The countdown will begin when you first miss a payment, prompting a repossession.

What Happens When Your Car Gets Repossessed

There are still rights that will offer you protection after repossession. For instance, in case there was any property in the car, this still belongs to you. The creditor is thus required by law to return the property to you.

Can A Repo Man Move Another Car To Get To Yours

You may wonder if a repo man can move another car to get yours. They could be able to do this if they can manage to prevent damage to the other vehicle and if they don’t breach the peace. Often the repo man prefers to watch your car and then once they get the change of an opening then they will repossess it.

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