what is a repo car

A repo car is a vehicle that has been repossessed by a lender or leasing company due to nonpayment. Repossession occurs when the borrower is behind on payments, and the lender seizes the vehicle as a last resort when they believe the borrower will not pay the loan. There are two types of vehicle repossession: voluntary and involuntary. Involuntary repossession means that the lender is seizing the vehicle because the borrower is behind on payments, and the borrower likely won’t know when this will happen. The repo agent normally uses a tow truck or pickup truck with a special towing attachment called a boom to take the vehicle back from the borrower. Once the vehicle is repossessed, the lender can either keep it to cover the borrowers debt or sell it. If the vehicle is sold, the borrower may be entitled to buy back the vehicle by paying the full amount owed, including past due payments, the entire remaining debt, and costs related to the repossession, like storage, sale preparation, and attorney fees. The difference between what the borrower owes on the contract (plus certain expenses) and what the lender gets for selling the car is called a “deficiency” . If the borrower can’t reach an agreement with the lender, the lender may demand that the borrower return the car, or the borrower may agree to a “voluntary repossession,” which might result in paying less in fees.