Repo question

[FLMommy]

What is the name of your state? FL

My husband and I are disagreeing about what happens after someone has their car repo'd (our friends had this happen to them last week) and we were just curious as to what the answer is.

If one's car is repo'd, am I correct to assume that the 'owner' still owes money to the lending company and that this money consists of at least the payments (plus interest) they were delinquent of? Do they owe more than that, say for example the difference between the value of the car and the amount still owed if the former is less than the latter?

Thanks in advance.

 

[Some Random Guy]

Your friend still owes the lending company the entire amount of the loan, plus the interest and fees that are accumulated daily according to the terms of his loan agreement. At some point, the lending company will sell the car at auction for dirt cheap. This amount (minus about $250 auction fee) will be deducted from his loan amount.

Then the lending company will come after him for the rest of their money, plus all interest that still accumulates.

 

[FLMommy]

Thanks for the answer. Wow that stinks. So what could they do to get it back? Pay the entire amount due all at once or is it pretty much "gone deal" once a car is repo'd?

 

[moburkes]

1. Try to negotiate with lender to catch up.
2. Have a friend buy it at auction, pay that friend back, and pay the lender the deficiency owed.

 

[phad23]

You seem very interested in your friend's personal business, but here is the scoop. There is a balance due on the vehicle. Lets say your payoff (oops, I mean your friend's payoff) is 10,000. charges are going to start acruing, late payment fee's, interest, etc. Once the car is reposessed and in the bank's possesion, they loan is forfieted. They the bank will take all of the fees that were acrued up until this point including a hefty repo fee. You balance can now climb to lets say 15,000. They will auction the car off. They have nothing to do with what the car will go for. What ever the highest bid is, they will take it. I have picked cars up for considerably less than wholesale. So, lets say they get 4,000. for it. They are going to probably sue you (or your friend) for 11,000. And they may even start acruing interest on it. They you will also have to pay court fees on top of that.

To make it more clear. DON'T DO IT!! It's a disaster.

 

[FLMommy]

You seem very interested in your friend's personal business, but here is the scoop. There is a balance due on the vehicle. Lets say your payoff (oops, I mean your friend's payoff) is 10,000. charges are going to start acruing, late payment fee's, interest, etc. Once the car is reposessed and in the bank's possesion, they loan is forfieted. They the bank will take all of the fees that were acrued up until this point including a hefty repo fee. You balance can now climb to lets say 15,000. They will auction the car off. They have nothing to do with what the car will go for. What ever the highest bid is, they will take it. I have picked cars up for considerably less than wholesale. So, lets say they get 4,000. for it. They are going to probably sue you (or your friend) for 11,000. And they may even start acruing interest on it. They you will also have to pay court fees on top of that.

To make it more clear. DON'T DO IT!! It's a disaster.

Thanks Moburkes, and Phad, thanks for the answer, even though you faulty, but understandably (since a lot of people ask for themselves, yet mention it's for a friend) assume, the car is mine. The reason I feel bad regarding our friend's (they're very close friends) is because my husband and I knew it was a mistake when they bought it (for 3 reasons, one, the guy was just about to get out of the USAF and didn't have a job offer, two, it was a brand new van, which imo is the stupidest thing one can do since a car looses so much value once it's driven off the lot, 3; it was a certain korean brand I won't mention here that is not of the greatest quality and resale value), and we didn't say anything to them, which we probably should have as close friends. They seem financially clueless about what they were/are doing, not just when it comes to their car, and I highly doubt they know what their options are at this point. We don't know either, since we've never been in a situation like that, neither will we ever find ourselves in that deep of a mess. I feel like it's a little bit of our 'obligation' as friends to educate them on where they should go from here, since we failed to tell them when they puchased the car. Thanks again for your answer, and next time, don't be so quick to judge/assume.

 

[phad23]

Your missing something here....

You have no obligation as a friend or anyone here to be advising them on their finances unless of course, they ask. They are grown adults and will learn (we hope).

Again, it's none of your business. I would be pissed if you put your nose in my financial mess unless of course you were offering some moula!

 

[FLMommy]

phad, you and I have a different opinion about true non-shallow friendships. If I was about to make a huge mistake and didn't know it, I would hope my good friend would let me know it wasn't a good idea. Now then if I would still do it regardless of the advice, then it would become quite another learning experience. You don't know the dynamics of this friendship, and really it's quite irrelevant to the original question.

 

[phad23]

phad, you and I have a different opinion about true non-shallow friendships. If I was about to make a huge mistake and didn't know it, I would hope my good friend would let me know it wasn't a good idea. Now then if I would still do it regardless of the advice, then it would become quite another learning experience. You don't know the dynamics of this friendship, and really it's quite irrelevant to the original question.

Didn't hey already buy the car and reposses it? That's what it says in your first post. So, that conflicts with your prvious post (Now then if I would still do it regardless of the advice, then it would become quite another learning experience).

 

[moburkes]

Didn't hey already buy the car and reposses it? That's what it says in your first post. So, that conflicts with your prvious post (Now then if I would still do it regardless of the advice, then it would become quite another learning experience).

Phad, can you please just drop it. You need to re-read her post. In its entirety. Then shut up already.

 

[FLMommy]

I'm going to lock this thread, probably should have done that earlier. Thanks to those who contributed with answers relevant to the original question.