I would like to know what happens if a car is repossessed and sold at auction, if the sale nets more money than the loan’s value. So if for example $4000 were owed on a car, and it auctioned for $6500, who gets the extra $2500?
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7 Comments
In the unlikely event this happens, after all fees, the car buyer would get the excess.
Do not worry the fees will eat it all up. Talk to your finance co.
In that rare situation the dealer wont pursue the individual for any losses. In terms of them making a profit , i don’t believe the dealer will give the previous owner any of it -after all they aren’t required to.
Esquire [Credit Analyst]
The repo guys and the bank will charge you fees that will take care of that $2500. They get REAL creative. You will never see one cent of that money.
The creditor has to return the excess to the borrower. Remember, the borrower owes not only the outstanding principal, but also accumulated interest, late charges and collection costs.
Also, the lender is not required to try to get the best price for the car. They are allowed to go for a quick sale below market value. If an employee of the lender offers to buy it right away for 4000, the manager might agree to sell it to him just to get the bad loan off the books. (I have seen this happen.)
They do. To pay for their trouble, trying to repo the car.
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