Car Repossession

[Leeswerge]

What is the name of your state (only U.S. law)? Nevada

My son got over his head in bad decisions and small debts, i.e., payday loans and a car title loan. When he couldn't make rent, he finally called me and fessed up to what was going on. I told him to pay rent first, because survival is essential. Second, let the loans go temporarily and they will catch up with you through collections or small claims. This is where we locked horns. On his car title, he thinks that he should let them come and tow his car to end it. (I think that is depression-failure speaking through him). I told him to man-up, walk his keys in, sign the pink slip, and end it there. That way, he mitigates how much they add to the loan for towing the car, etc. Any parents (or lawyers) been there and done that? I'd like to pass it on to let him know what others think. Forget the lecturing, that has been done.

 

[single317dad]

What is the name of your state (only U.S. law)? Nevada

My son got over his head in bad decisions and small debts, i.e., payday loans and a car title loan. When he couldn't make rent, he finally called me and fessed up to what was going on. I told him to pay rent first, because survival is essential. Second, let the loans go temporarily and they will catch up with you through collections or small claims. This is where we locked horns. On his car title, he thinks that he should let them come and tow his car to end it. (I think that is depression-failure speaking through him). I told him to man-up, walk his keys in, sign the pink slip, and end it there. That way, he mitigates how much they add to the loan for towing the car, etc. Any parents (or lawyers) been there and done that? I'd like to pass it on to let him know what others think. Forget the lecturing, that has been done.

Your advice is somewhat sound in that there may be a small reduction in fees due to surrendering the vehicle (though fees to tow from the bank to an auction, paperwork fees for repossession, and legal fees for court action will be unavoidable). He'd also avoid a situation of losing his personal belongings or paying to get them back after his car is towed in the middle of the night. The problem is he'll still take a credit hit for the repo either way, which will wreck his credit for some time to come. If he could sell the car and satisfy the loan or simply catch up the payments he'd be far better off.

 

[racer72]

Your advice is somewhat sound in that there may be a small reduction in fees due to surrendering the vehicle (though fees to tow from the bank to an auction, paperwork fees for repossession, and legal fees for court action will be unavoidable). He'd also avoid a situation of losing his personal belongings or paying to get them back after his car is towed in the middle of the night. The problem is he'll still take a credit hit for the repo either way, which will wreck his credit for some time to come. If he could sell the car and satisfy the loan or simply catch up the payments he'd be far better off.

There a a couple caveats that go along with the above. The payday loan lender has no interest in selling repossessed cars. The car will be turned over to a wholesaler and it will be sold at auction, likely for less that the retail value. Your son will be on the hook for any deficiency if the car sells for less than what is owed. Also, he will be responsible for the costs associated with selling the car. On the plus side, if the car sells for more than what is owed and the other expenses, they have to give him the difference. He would be better off trying to sell the car himself to raise the funds to pay off the loan.