Whatever Happened To the Repo Man?

Fall behind on monthly car payments, and you might meet him (or her)

James M. Flammang

Repo agents are still an integral part of the
financial arm of the automobile trade.

Should we be scared of the "repo man?" In caper films and in comedy TV series, the fellow who shows up at your driveway to snatch away your car might be depicted as a nefarious intruder, laughing at the law as he speeds away with your vehicle in tow. All because you missed a monthly payment.

One bizarre film even gave its "repo men" the task of redeeming body parts. Human ones, that is.

Most repossessions, thankfully, involve cars, not carcasses.

The fictional version of the repo man does exist - though far less prevalant than in the past. Urban dwellers - especially those whose creditworthiness is on the shaky side - may have heard plenty of tales.

Some are reminiscent of the one I heard many years ago from a tow-truck driver who spent his nights scouring parking lots and "No Parking" curbside sites, searching for towable vehicles. As he reported boastfully, it didn't matter much whether the car was actually parked illegally. If he could hook up his towing gear to the vehicle, it would disappear in a matter of minutes. Maybe seconds. Sadly, his overzealous reached the point of criminality.

Today's repossession agents are likely to be considerably more law-abiding, businesslike, and sophisticated. During a trade event, Patrick Altes, host of the Repo America podcast, noted that at a Congressional hearing, legislators had been surprised by the "sophistication" of repo folks. They seemed to have expected to confrontation by a gaggle of "knuckle-draggers." Because of perceptions derived from reality shows, another executive explained that the repo industry is focused on "changing the negative reputation that the Repo Man may have, which is untrue."

The Repo Man is one member of a financial trio, preceded by the activities of a debt collector (maybe several of them) and - if necessary - a skip tracer, hired to locate a difficult-to-find debtor. Actually, there's a fourth member of the group: the creditor, or lender. That's the organization that agreed to loan you money (granted you credit) for your vehicle purchase, and arranged the repayment terms.

If, like most consumers, you financed your car and you're late making one of the monthly payments, the prospect of repossession begins to emerge. Miss that payment, and especiallly the next one, and you're likely to be on the phone with debt collectors - more often than you'd like. In most states, even a single missed payment may be enough to set the repo ball rolling, making your car a potential candidate for takeaway.

Before reaching that point, a specialist in bill-collecting is likely to start calling, texting, or e-mailing the defaulted motorist. Such actions are permissible, but are subject to legal constraints. Phone calls might be limited to certain hours, for instance.

One day soon, unless what's called the "default" or "default judgment" (the amount you now owe) is resolved, you might see a repo man (or woman) strolling up to your defaulted vehicle. Moments later, he's driving it off himself, or a tow truck is hauling your car to an impound lot.

At that point, you are not the legal owner of the car. In fact, you never were, and never would be, until the entire loan was paid off.

Who does own that vehicle while the debt is active? There could be a string of "owners" involved. A creditor may have the right to sell your original contract to a third party, legally referred to as an "assignee. Auto loan contracts also are sold in batches, traded in a specialty marketplace almost as if they were stocks.

If a creditor threatens to repossess your vehicle, contact them immediately to see if a monthly payment plan might be established. Otherwise, your creditor usually has the right to order a repossession without getting court permission, based strictly upon late or skipped payments.

However, that creditor has to warn the non-paying customer, the first time a default has taken place. Consumers must be informed of their rights, including the right to "correct" an alleged default in payment.

State laws on repossessions differ considerably; but in most, advance notice of an imminent repo is not required. The repo agent is permitted to enter your property, seeking the vehicle, as long as no "breach of the peace" is committed. Using or threatening physical force is not permitted. Neither is removing the car from a closed garage, unless you grant permission to the unwelcome stranger.

Continuing with repossession after you have resisted or refused to allow the repossession may be considered a "breach" of the law. The defaulted debtor can sometimes call the police, requesting action against a repo that's taking place. But the police can intervene only if the repo agent is violating a law.

After the defaulted car is taken, the creditor might either keep it or resell it. In some states, that creditor is obligated to inform you about the specific disposition of the vehicle. If the car is to be sold at auction, state law might compel the creditor to tell you where and when the disposal event will take place. Then, if you wish, you could participate in the bidding yourself.

As the defaulting debtor, you might be entitled to "redeem" the vehicle before it's taken to the auction. To "buy back" the car, you must pay the full amount still owed, along with such related expenses as storage and sale preparation.

At the auction, your creditor doesn't have to obtain the highest possible bid. The forlorn vehicle must simply bring what's called "fair market value," in a sale conducted in a "commercially reasonable" way.

Some defaulted debtors elect "voluntary repossession," merely giving up the vehicle without any fuss or resistance. Naturally, the entire remaining debt - referred to as the "deficiency" - must be paid. Late payments might still wind up on your credit history, just as a repossession would.

If you think your car is in line for repossession, it's wise to remove all personal items. If you fail to do so, you're still entitled to have them returned to you later, but it's one more step that's best avoided.

Repo agents might find dangerous substances and weapons, said Bryanna Cox, president of Paradigm Recovery, during a trade event. Dealing with personal possessions also adds cost to the repossession. Repossessors have been trying recently to establish uniform guidelines on how to deal with those personal items, including the possibility of charging a fee for storing them. Best bet: remove everything that's loose from the car before it's about to be repossessed.

Late in April 2020, not long after the Covid pandemic burst into the world, finance officials were concerned about indebted families losing jobs and missing car payments. Democrats initiated a moratorium on repossessions, said Jennifer LaTourette, a lobbyist at Van Scoyoc Associates, during a used-car trade conference.

"Repo moratoriums" were for specified periods, such as two weeks, added Jessie Herdrich Irwin, of PAR North America. According to Chris McGinness, CEO at Primeritus Financial Services, lenders "put accounts on hold" in those early days, except for "voluntaries and impounds," which were a small share of the total. By the end of 2020, moratoriums were largely gone, leaving debt-laden families struggling to make those temporarily-blocked car payments.

How the repo agent is paid can affect the likelihood of misbehavior. If he or she gets a fee only when a car is brought in, it could be tempting to cut a corner or two during the repossession process. As for potential violence, some repossessors do have a history of committing offenses, but safety concerns go two ways. In this era of increasingly angry consumers, especially as the pandemic continues to fray people's nerves, agents have to consider their own safety while trying to confiscate an unhappy debtor's vehicle.

"Repoing" takes skills, explained Jose Delgado of Location Services LLC, during Used Car Week - an annual gathering of executives in the used-vehicle arena. A person can't - or shouldn't - suddenly decide to go into the field, unprepared; but some are "born into it."

About 2.2 million vehicles are repossessed each year, according to 2021 Repossession Facts. That's 5,418 repos per day.

According to an article in the Chicago Tribune, defaults have been soaring because people face negative social pressure to borrow excessively. Tom Webb, former chief economist at Cox Automotive, warned several years back that Americans were increasingly losing their creditworthiness due to unsustainable automobile debt. If they fail to control their financial behavior, repossession rates will keep rising. Consider yourself warned.

So, how can you keep the Repo guy away? Obviously, the best course is to make every payment on time. If a temporary financial situation develops - job loss, medical emergency, urgent car repair - causing you to fall behind, let the creditor know immediately. Remember, missing just one payment could set the repo process in motion.

Additional information on repossessions may be found at the Federal Trade Commission website.

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