Because repossession is an expensive process, the finance company generally sends several late or collection notices to the vehicle owner before any action is taken. If the owner makes payments or contacts the finance company while these notices are being sent, repossession may be averted.
The Finance Company Contracts a Repossession Agent to Retrieve the Car
Finance companies rarely repossess a car themselves; instead, they maintain contracts with professional repossession agents. When repossession becomes necessary, a professional agent is contracted to retrieve the car. While the finance company generally provides the repossession agent with a key, the agent may use any method necessary (such as booting or towing) to retrieve the car. To avoid confrontation, agents generally perform this action when the vehicle's owner is away, though agents are specially trained to effectively retrieve the vehicle if confronted.
The Repossession Agent Notifies the Local Authorities
Because the vehicle's owner is likely to notify the authorities that the repossessed car has been stolen, the repossession agent notifies the authorities of the repossession activity. This action also prevents police intrusion or suspicion of auto theft.
Any Personal Effects are Removed From the Vehicle
When the vehicle is retrieved, it is taken to the repossession agent's or finance company's offices; where the vehicle is taken depends on the arrangements secured between the finance company and agent. When the car arrives at the office, any personal items such as satchels, clothing, electronics, papers and other effects are removed and placed in bags. Personal items semi-permanently attached to the vehicle, such as security systems, are considered part of the vehicle and are not removed. The personal effects are stored at the office for later retrieval.
The Car is Sent to Auction
Once the car has been cleaned and all personal items have been removed, the vehicle is sent to an auto auction. To avoid confrontation, vehicles are often sent to auctions several miles away (sometimes in another state). The car is then sold at auction, generally for a price well below the market value.
The Vehicle's Owner is Responsible for the Remaining Balance
When the car is sold, the funds from the auction are applied to the outstanding balance owed on the car. Because the sales price is rarely sufficient to pay the balance in full, the finance company holds the vehicle's owner responsible for any remaining amount. If the owner is unable or unwilling to pay, the finance company may obtain a judgement forcing the payment of the balance due.