Auto Repo

[RAPHIEL]

I PURCHASED A CAR IN TEXAS AND HAD BEEN MAKING PAYMENTS ON IT ON TIME, UNTIL LAST YEAR WHEN I CHANGED JOBS.
IM MISSED ONE PAYMENT AND MADE TWO PAYMENTS OF 2/3S WHAT THE PAYMENT SHOULD BE. THE CAR WAS REPOSSESSED, AND THEY SAID I HAD 10 DAYS TO RECLAIM IT OR IT WOULD BE SOLD; IF THE CAR IS SOLD, WOULD I STILL HAVE TO PAY OFF THE REST OF THE LOAN, IF SO, WHY? I MEAN AFTER ALL THE BANK WILL SELL THE CAR AND GET THEIR MONEY, WHY SHOULD THEY GET PAID TWICE.

 

[Michael Wechsler]

No, the bank will not be paid twice. You have a right to your equity in the vehicle, which will likely be small. The leasing company will deduct the amount of repossession and auction costs. They will pay you the difference.

For example: Car costs $20K, you have paid $10K on the loan. Car is repossessed and is sold for $12K. Cost to repossess, $1K, auction cost $750. 10K of loan plus 1,000 and 750 gives you a total of $11,750 to be deducted from the proceeds. Amount in excess: $250 which is given to the lessee.