Car repossessions are a common occurrence. Up to 5 million automobiles were confiscated from people who fell behind in their car payments in 2009, according to Philip Reed of the Edmunds.com automotive site. Repossession firms are legally entitled to seize cars on behalf of finance companies when borrowers stop paying, but they must first locate the vehicles in question.
A car loan is secured financing in which you agree to allow the vehicle to act as a repayment guarantee. Your bank or finance company has the right to take your car if you go into default, which often means missing just one payment, according to the Federal Trade Commission. Your contract spells out the exact terms. A repossession firm comes after you to take the vehicle if you default and do not come to an alternate agreement with the lender.
Most states allow vehicle repossessors to seize a car from private property, as long as they do not breach the peace, the FTC explains. Some people hide their vehicles by locking them in garages or keeping them in other secured areas. Repossession firms use skip tracing to track those borrowers and their, according to Reed. Methods include tapping online databases, calling relatives and references and physically checking potential locations. Hidden cars are repossessed as soon as they are left unattended in an accessible area.
You rack up costs if you hide your car when you know it is up for repossession, according to Lou Pizzaro of the television show "Operation Repo." Repossession firms charge finance companies for their recovery efforts, including searching for hidden vehicles and actual seizure expenses. These fees are passed along to you once your automobile is finally repossessed. Your lender can sue you to recoup its repossession costs if you refuse to reimburse them voluntarily.
You may be able to successfully hide your car from repossessors for a while, but Reed warns that you should be prepared to lose it at any time. Do not leave valuable items or important personal possessions in the vehicle. Remove any aftermarket accessories you added, like rims or special stereo equipment. Legally you are entitled to reclaim your personal property after the vehicle is taken, but it sometimes gets lost during the repossession process.
You can turn your car in voluntarily when you know it is up for repossession to avoid the stress of hiding it. You will still owe any remaining amount on the loan if the bank cannot sell the vehicle for enough money to cover the outstanding balance. However, you avoid fees and expenses associated with a repossession, which would otherwise be passed along to you.