The economy is still mired in its recession, and everyone feels a pinch. It will not surprise you to learn that over the past year the number of car returns has increased. Experts believe that in 2008 the number of daily repos increased by almost 20%. What's more, the increase in activity is not limited to certain types of cars. Luxury models are produced as fast as inexpensive models.
Since this is an area of the automotive industry that few people know about, I'm going to explain what is happening behind the scenes. We will follow the repo-vehicle path as it puts its hands through the process.
The man who owns the vehicle
Suppose you are buying a new Mercedes. You found a dealer who was willing to let you drive him away without spending any money. Of course, the monthly payments are incredibly high. Eight months later, you lost your job and began to experience problems with timely payments. Sometimes you just stop paying the lender every month.
The lender will send you several notifications asking you for your current current account. If they do not hear from you, they will begin legal preparations for a return. For example, the lender will bail, ask the court for a tax and notify you where Mercedes will be sold. Then the repo agent is sent to pick it up.
The man who destroys him
Credit companies are hired by a lender. Laws regarding what a repo agent can and cannot do to purchase a vehicle depend on the state. In addition, state law varies depending on what the owner can do (in this case, you). For example, some states will allow an agent to go into private ownership without the permission of the owner to purchase a car. On the other hand, several states will allow you to move your car to avoid a repo agent. In this case, you need to find an agent (and your Mercedes).
Auction and dealership lot
Suppose the agent found you and took over your Mercedes. In most cases, the car will be in a private auction, at which the lender, dealer representative and any other dealers interested in buying it for resale are present. If your Mercedes is bought - and it probably will, - it gets on the lot of the new dealer.
I hope you never need experience with the return of the car. However, this is an important part of the automotive industry and explains how many used cars fall on dealers lot. As for reliable vehicles, they, as a rule, are. But, use the same level of caution that you usually do when buying a used car.
