A repossession is easy to avoid.
Guarded with barbed wire supported by a chain link fence the repossessed cars and RV's in the Skipco lot await their fate of either the auction block or pick-up from their former owner.
The first step in making sure it doesn’t happen to you is to make sure you can afford the vehicle. If you find yourself having difficulty making your payments, contact the bank immediately. The lender will work with you to make alternate payment arrangements, such as allowing time to catch up or refinancing the terms.
“If you are working with the bank and keep the arrangements you make, they’ll work with you as long as they can,” says Matt Edmonds, a sales representative at Waikem Auto Group.
A repossession is the last thing a bank wants to do, he says. “There’s an awful lot of cost in doing that.”
Edmonds, who worked as a loan officer at First National Bank in Massillon for about 12 years before becoming a repossession agent at Skipco for about seven years, explains the process a bank must go through in order to repossess.
When an account becomes delinquent, if the owner has not contacted the bank, the bank will begin to get in touch with the owner via phone calls and letters.
Often, the bank will try to refinance the original loan with a lower monthly payment and a loan extension. “The banks are not the bad guys here,” Edmonds says. “They really try to work with the customers.”
If attempts to resolve the delinquency fail within two to three months, the bank will then resort to repossession.
When a bank decides to repossess, it has to hire a repossession agency, which costs at least $150. Then the bank must sell the vehicle at a public auction, which also entails costs. After the sale of the vehicle, the bank calculates the deficiency — the balance still owed on the vehicle after the auction sale price.
At this point, the bank contacts the original owner about the amount still owed, even though the chance of getting the rest of the money after a repossession is slim.
This is the biggest reason the banks will try to work with the original owner as much as possible before repossessing, Edmonds says. If the original owner refuses to pay the deficiency after public sale of the vehicle, the bank can go after the original owner’s assets and wages. But if doing so would cost more than what is owed, the bank may decide not to force collection.
— Angela Hoover
The Burr is produced by students at Kent State University twice per academic year.No part of The Burr may be reprinted without permission.