How Do Title Loan Companies Find Your Car After Default?
In most cases, title loan companies find your car after you enter loan default by checking your credit report. This report is essentially a detailed record of your credit history. It is compiled by credit reporting agencies (like Experian, Equifax, and TransUnion). The report will include plenty of relevant personal information, such as your name, address, and past addresses. It may also include your employment history and other identifying factors that tell creditors and lending companies more about you. While credit reports are primarily used to determine your creditworthiness and credit risk, they can be accessed by your title loan company if you enter a loan agreement and fail to meet your debt obligations.
If the title loan company is unable to find your most updated address through your credit report, they may rely on other means to find your location. This includes accessing public information and checking your social media to see the places that you frequent with the vehicle. Public information can include your address, phone number, workplace, etc. If you frequently tag your location on social media, a repo man may frequent those locations in order to find your vehicle.
Why Does a Title Loan Company Repossess Your Car?
Before a title loan company can find your car, a lien is added to your car’s title after the loan is funded. This lien is the lender’s legal right to your car during the repayment process. While the lender is not the owner of the vehicle, they have a vested interest in your asset while you are paying off the loan. This is due to the fact that you are required to use your car’s title as collateral for funding. Taking out a title loan involves signing a loan contract and agreeing to the terms and conditions of the loan. This includes paying the loan according to the predetermined schedule. If you fail to keep up with your payments, the potential consequence of loan default is vehicle repossession.
The exact timeframe of vehicle repossession will often vary depending on:
- Your State of Residence
- The Terms of Your Loan and the Lender You Decide to Work With
Some lenders will offer grace periods and other options if you are struggling with your payments. Keep in mind that a title lender or loan servicer will be more willing to work with you if you reach out to them prior to defaulting on your loan. Proactive communication is important! Reach out to the appropriate party ASAP if you can’t make your payments.
If you do not reach out and miss payment after payment, a title lender can legally repossess your car. They may sell it to cover the remaining balance of your car title loan.
How Does a Car Repossession Work?
The “repo man”, or the third-party repossession company that a title lender may hire to complete the repossession, must follow the applicable title loan repossession laws in your state. This may include providing sufficient notice of repossession and sending a letter so that you have ample time to rectify the situation.
The letter will let the borrower know that the loan is in default and will provide a timeframe to resolve the situation, i.e., paying the overdue amount or paying the loan in full. This letter is known as a “right to cure” notice.
Depending on your state of residence, your lender may send you a specific document that shows you the steps you can take to recover your car before it is sold.
In most cases, if you have left something important in the car, the lender will be required to send it back to you or allow you to retrieve it. After your car is repossessed, it is typically taken to a storage yard or a tow lot before it is auctioned off or sold. If you were to recover your vehicle, you may be required to pay storage and tow fees. This is in addition to your unpaid loan amount.
What Can A Repossession Company Not Do?
Your vehicle can be legally seized if it’s located in your yard, driveway, or in a public space. If there is clear access to your vehicle through public roads, it’s typically fair game.
While a repossession company can take your vehicle if you default on your loan, they don’t have completely free reign. As mentioned above, the repo man or company must follow the applicable repossession laws in your state. Additionally, they need to follow these general rules and regulations:
- Cannot Breach the Peace: Breaching the peace is a legal term that refers to breaking the law or causing a disturbance while repossessing the property. Some relevant examples of breaching the peace include breaking into your home or garage or damaging property to get your vehicle.
- Cannot Use Deceptive Practices: A repossession company cannot misrepresent themselves during a repossession. This includes pretending to be law enforcement or another type of public official.
- Cannot Trespass or Harrass: Repossession agents will not be able to threaten, harass, or intimidate you into allowing them access to your property. Additionally, trespassing on your property is also prohibited.
Finally, any actions that violate state or federal laws, such as the Fair Debt Collection Practices Act (FDCPA), are prohibited. This includes contacting you excessively about the debt. You should not be contacted about your debt after a certain time at night as well.
FAQs About Title Loan Companies Finding Your Car
Worried about title loan companies finding your car? Here’s what you need to know:
How Do Repo Companies Track Your Car?
Repo companies can “track” your car by using publicly available information to locate it. They may use your social media to track the stores and locations that you frequent. They may visit your place of employment to find your vehicle and seize it.
What Happens if the Repo Company Never Finds Your Car?
In extreme cases, if your car is never located and your loan is in default, the title lender may decide to file a lawsuit against you for the unpaid debt. Depending on the outcome of the lawsuit, you may be obligated to hand over the vehicle or pay the outstanding amount that you still owe. It’s important to reach out to your lender or loan servicer before missing a payment. If you are proactive, you can try to avoid repossession and loan default!
What Happens if I Can’t Pay My Loan?
If you can’t pay your loan, don’t wait for title loan companies to find your car. The first step you should take is to contact your title loan agent. They can help you discuss your options, such as refinancing or asking for something called a loan extension. With a loan extension, you can skip a certain number of payments. The payments will be added to the end of your loan. This does increase the duration of your loan, but it can be helpful if you are experiencing temporary hardship.
Will My Car Have a GPS Tracker After I Take Out a Title Loan?
It depends. Some title lenders will require that your vehicle has a GPS tracker if the loan is quite large and the vehicle is valuable. Make sure to talk to your lender about this before you sign a loan agreement.