If you’re the borrower on a defaulted automotive loan, meaning you’re behind on monthly payments, be aware that lenders are starting to ramp up their recovery tactics to recoup their funds.
As an example, toward the end of 2022, Wells Fargo Automotive began offering incentives to repo companies to prioritize the repossession of their vehicles, according to an article from Auto Finance News. Wells Fargo is offering $500 per vehicle to repo companies amid a shortage of drivers and other personnel.
Frankly, there aren’t enough repo agencies available to recover their vehicles, so banks are putting bounties out to have their vehicles repoed first. So if you have a vehicle with a loan in default, be aware of this, but also consider that you may be in a good position to negotiate the remaining cost with your lender. Your lender doesn’t actually want your car, they just want the money. Oftentimes under similar circumstances, lenders are more willing to negotiate the amount for a lien release rather than be at risk of never recovering that vehicle.
Even if a vehicle is repoed, there are many costs involved. First, the $500 incentive, then the transportation fees, and auction fees which can add up to several thousands of dollars. So in lieu of that hassle, lenders often see the value in negotiating rather than paying thousands of dollars to repo a vehicle in unknown condition or an unknown location.