Keeping the repo man away: What to do when you fall behind on car payments

For any number of reasons, people find themselves unable to make their car payments. The repo man is no one’s friend, at least not during his working hours. They are big, bad, mean and scary. But, they’re just doing their job. When you don’t pay your lender, they show up, sometimes at all hours of the night.

Richard Grosvenor gathers information before repossessing a car. AJC file photo

Richard Grosvenor gathers information before repossessing a car. AJC file photo

Here are three ways to avoid having your car repossessed, based on the PTMoney.com blog. For full details on each, click on the above link. Here’s a snapshot:

1. Call Your Lender – Get on the phone with the company that lent you the money for the car and talk to them about your situation. They should be open to working with you and keeping your business. They don’t want a charge-off.

2. Consider a Refinance – If you’re past that point, consider asking your lender about a refinance. Yes, you can refinance a car loan. By extending the term, you could potentially lower your payment to something you can afford each month.

3. Sell the Car – Another option would be to sell the car and completely pay off the car loan. I like this solution the best. Because if you can’t afford something, then you shouldn’t have it.

Question: Have you ever fallen behind in car payments? What did you do? Have you ever had an encounter with a repo man?

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14 comments Add your comment

Robert Myers

June 16th, 2010
3:53 pm

I have been in the banking business fo almost forty years and have worked for several large banks near Chicago. I have personally repossessed over 1000 cars. I have always worked with peoplple to resolve their problems before it gets to the point of where the collateral needs to be repossessed, ignoring the problem will almost always result in bad outcomes for the debtor. Your comments are sound advice. Oh, by the way most of the shows on TV portray repossessors as thugs and the shows are mostly staged! My advice is contact your lender as soon as you have problems,Thanks

JR

June 16th, 2010
7:25 pm

We recently had our car repoed…The company that had our loan would not budge, would not do anything. We had never missed a payment with them, then my wife had a bout with cancer and had to have surgery. My wife was out of work for aboug 3 1/2 mths..We fell behing on everything, but our load with a car they would not budge. Thank God my wife is okay and back at work, however, we are with one car and it is a huge burden. The person that came and got our car was very nice and I did not have a problem with him, he was doing his job. However the lender for the car…they are real jerks and do not care.

Winfield J. Abbe

June 16th, 2010
8:04 pm

If you ask a repo man if they got a court order to pick up the car before they did, they will tell you the borrower already signed an agreement providing for them to pick up the car anywhere. In other words, they repossed the car by contract. But if a landlord seeks to do exactly the same thing, the courts reffuse to recognize it and force the landlord to go to court before hand and obtain a court order to repossess the property all the while the tenant is possibly destroying it and often not paying any rent. This can go on for months. The unfair courts usually take the side of deadbeats. The repo men are getting a free ride from the courts unfairly receiving indulgence compared to landlords. Suppose they had to go to court before they could repossess a car? This illustrates the power of the banking lobby which, through payments of bribe money to legislators, allows them to receive favored treatment under the unfair law and unfair courts of GEorgia which encourage irresponsibility by deadbeat lying tenants every day. Billions of dollars are lost every year collectively by landlords from this blatant unfairness. The lawyers have totally sold out the landlords. Can you imagine what it would be like if a business had to have a civil hearing prior to evicting a lying deadbeat stealing and defrauding them? They just call the police and the police evict the good for noting for free as they do for hotels and motels. But the landlords routinely are treated unfairly and illegally and receive the shaft, being forced to pay for their justice, which usually never arrives anyway. Georgia is a very corrupt state. All government wants from landlords is their unfair tax money to transfer to the deadbeats who usually pay nothing at all. The story of Robin Hood is alive and well in Georgia; steal from the haves and give it to the good for nothing deadbeats and lying cheating thieves.

Matt

June 16th, 2010
8:59 pm

Winfield – If you’re so unhappy here, why don’t you operate in another state? What are you teaching the system by contributing to it?

Bill Limberg

June 16th, 2010
9:44 pm

Winfield speaks the truth and tells it like it is. The banking lobby is this state is very powerful. Gubernatorial candidate Roy Barnes is very tight with the banking lobby. I am sure if King Roy is re-elected more of this will continue.

Tim

June 16th, 2010
10:44 pm

Winfield…you must be in liberal New Jersey. I know in Cobb and Douglas County, I can file for eviction and have possession within 4 to 6 weeks. Georgia judges accept no reason for not paying. I always follow the law so I always win in court. If the tenant tears up the house, I let the local law enforcement inspect it and then file criminal charges. Chapter 13 is the only thing that can postpone an eviction.

Ted Striker

June 16th, 2010
11:03 pm

Good topic, Rana — With nearly 17 years in the finance business, I heartily attest to the wisdom of your #1 & #3 suggestions. The average lender is willing to do everything in their power to work with a borrower if there is any way to see light at the end of the tunnel. A repossessed vehicle is almost always a loss to a lender and we’re talking thousands of dollars.

However, the #2 suggestion there is a bit overstated and creates too much false hope for the uninformed. Refinancing a vehicle loan — unlike refinancing a house — is rarely helpful to the average borrower. I’ve seen it done many times and it’s almost never a long-term benefit to the borrower. Here’s why. The payments generally aren’t lowered enough to make a real difference to the borrower. If all a borrower can afford is $200 a month and they have a $450 payment, dropping their payment to $400 — which may be all that is possible with a refinance — isn’t really going to help them very much.

Why not just lower it to $200 then? Here’s why. Vehicles are rapidly depreciating assets and as such, rarely have sufficient equity to offset the increased risk of a longer term. The age of a vehicle will also come into play, as finance companies would typically take losses on loan terms in excess of 5 years (on an average price vehicle).

One final editorial comment. No knock on local banks or credit unions, however they typically have less flexibility to offer “extensions” — the ability to skip payments if trouble arises — than the manufacturing finance sources. That’s because the manufacturer finance source has all their eggs in one basket so to speak — automotive finance — and accordingly, has to do everything in their power to keep the vehicles being financed and on the road.

Brina

June 16th, 2010
11:08 pm

I have been a repossession agent for the last 4 years. The laws are very clear, yet law enforcement differs from county to county. Not all of us are big and mean. Nor are we all men. I try my best tp be professional in my work, as I would want to be treaed, but it has to be understood that I only get the order when a debtor either does not communicate with their lender or does not keep their word on arrangements made with the bank. They DO NOT want your car, they want your money instead!! Best advice, Talk to your lender, tell the truth, and if you make a promise, follow through with it. Otherwise, I’ll be knocking on your door in the middle of the night or going into your work to get your keys.

Also, the shows on t.v. are fake. In my years, I’ve had guns pulled on me, been shot at, and been cussed out by every type of person known to man. Yet, I have never been in a fight with anyone over a unit.

Uncle Tom

June 16th, 2010
11:36 pm

Yeah, and I’m sure if good ol’ Boy Ox is elected, we will all be able to sleep soundly at night.

jackamrose

June 17th, 2010
5:42 am

Mortgage Loan Modification is the only solution to save your home and stop foreclosure. Some 650,000 troubled borrowers have been put into trial loan modifications under the president’s foreclosure rescue plan, the Treasury Department said Tuesday. That number represents only 20% of eligible homeowners. Mortgage Home Modification Program is the solution to save your house and stop foreclosure process Use this free tool to see if you qualify for loan modification http://bit.ly/9iwXDC

Stephanie

June 17th, 2010
4:19 pm

Here’s an idea..if you can’t afford it, accept the fact that it’s going to be repoed. Sorry if you have bad luck, but why should you get a break where others do not? I pay my bills on time and don’t carry loans on my two cars. Yes, it may suck if you can’t afford the car, but if you can’t afford it, you CAN’T afford it. Plain and simple.

Ole Guy

June 20th, 2010
1:47 pm

Stephanie hit the nail squarely on the head. Very true, bad, unforseen events do occur that, were it not for these things happening, the financial difficulties many face would not have transpired. However, BY AND LARGE, we have become extremely spoiled to the notion that we may enjoy a lifestyle which, far-and-away, exceeds our financial abilities…I believe “keeping up with the Jonses”, a term coined around the mid-20th Century, pretty much describes the “fiscal illness” which has struck this Country.

Mr Myers’ experience bears out this social phenomenon. Over a period of nearly 40 years…a period, no doubt, covering both good times as well as difficult periods…an average of 2 vehicles per month has been repossessed. While this may or may not seem a significant number, what is noteworthy is the fact that there are always people who will insist, for one reason or another, on leveraging their fiscal house beyond…often times, FAR beyond…reason and responsibility.

While it may seem cruel and heartless, one must pose the question, to Abbe and, I am certain, many others, “Why should the financial institutions consider YOU, and YOUR situation any different from me”? If I owe em a buck, and I fail in my obligation, then that lost buck will be realized, by the financial institution, in the form of increased costs of doing business; that cost will be passed on to other customers…LIKE YOU. How would YOU feel about paying for MY irresponsibility?

While this may seem somewhat oversimplified, the hard bottom line is that, while YOU fail to meet YOUR financial obligations, YOU are expecting others to (involuntarily) pick up your slack/quite possibly, your irresponsibility.

JR, you are absolutely correct, the lender DOES NOT CARE ABOUT YOUR PROBLEMS…why should they? Do you care about the lender’s problems? Do you care about MY problems? Unfortunately, we do not live in “Little House on the Prarie”. Whether that’s a good, or not, indictment on society is another philosophical question, however, we all do live in the common world of REALITY and, good or bad/like it or not, it is what is, my friend.

Regards to your loved ones.

Ole Guy

June 20th, 2010
2:08 pm

Jack, that 650,000 represents X monies per house…pick any number you want and do the arithmetic. Now, as a taxpayer, HOW DO YOU FEEL?

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