Repossessing a car is necessary when the borrower continually fails to make required loan payments and is not interested in working out the situation. While repossession can be stressful for both lender and borrower, it is unfortunately often the only way a lender can recoup his losses when someone does not pay their bills on time. Fortunately, repossessing a car in most cases is easy and does not require a lot of time or expense. In small communities, the lender can often do his own repossession and not hire someone to look for the vehicle.
Check your contract with the defaulted borrower before repossession. Be sure it says that if they do not pay the loan, they will lose the vehicle. Virtually all auto lender contracts have this language, but checking is an important step to avoid potential legal trouble from an upset borrower.
Call or write a certified letter to the late borrower one last time. Inform him or her that you will be taking the car back if this non-payment situation continues. Try to work it out if at all possible.
Stop by the borrower’s employer or place of residence and take the car. Alternatively, you could send an employee or interested friend to do this task. If you do not have a copy of the key, then you will need to get a tow truck to simply tow the car away. Remember if someone is in the car you cannot legally enter the vehicle with your key or hook it up to a tow truck, because this could be constituted as abduction or reckless endangerment.
Call the local police once you or your representative have repossessed the car and report that you are the lender and had to take back a car due to a defaulted loan. That way if the borrower calls the police claiming his car was stolen, they will be informed it was repossessed and you will also have already reported that you are the lender and true owner of the vehicle.
Hire a private investigator if it seems the borrower skipped town with your car. They will be able to use their resources to skip trace the person who has the car and can probably do so more quickly and with less red tape than you can. Private investigators, some of which also work as repo men, usually charge a couple of hundred dollars for this kind of case. You could then hire a repo man who works in that town to actually take the car once it is located. Repo men usually charge about $300 to take a car, and if the town is far away it would be worth the extra expense to get the vehicle back in your hands.
Remember you have the right to sue the defaulted borrower for all costs associated with the repossession and any profit loss from their absent payments.
Consider that the best time to repossess a car may be the middle of the night.
Do not get into a verbal confrontation with the borrower if he or she catches you repossessing their car. If necessary, call the police and tell them the situation so you cannot be accused of disturbing the peace during the repossession process.