Repossessions are on the rise while many people are hurting financially. In a repossession, the lender seizes an item—in many cases a vehicle—because the borrower is behind on payments.
This week on the rich & REGULAR podcast, Kiersten and Julien Saunders explain how repossessions work and how the industry is currently operating, with fewer repo companies in business despite a higher demand.
There are two types of repossessions: voluntary and involuntary. A voluntary repossession is like a return—giving the vehicle back to the lender and paying less fees. The cost of an involuntary repossession depends on factors including your debt, how long the car is impounded and the deficiency between what you owe and how much money the lender makes, should they choose to sell the car.
For those who are financially strapped or unable to make payments on a repossession, Kiersten and Julien review solutions, including loan modifications and adjusting the loan terms.They also share how to get the best deal when selling or buying a car.
“So much of being good with money is about being proactive and avoiding potentially dire situations altogether,” Kiersten says. “In a perfect world, you don’t have to know anything about repossessions because you’ll never be in that situation.”
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