The Expert Podcast

Be aware that if you're the primary borrower on a defaulted automotive loan, some lenders are starting to ramp up their recovery tactics because they need to get some money. Here's an example: Wells Fargo Automotive is offering incentives to repo agencies. The lender is offering $500 to prioritize repossession of its vehicles — a $500 per vehicle incentive to repo agencies to prioritize the recovery of their vehicles amid a shortage of repo personnel.

You're going to find that, because of the fact there's not enough people out there to recover these vehicles, some banks are putting bounties on their vehicles to have them put at the front of the line. So if you have a vehicle that has a lien on it that's in default, you may be in a good position to negotiate with that lender — because they really don't want the vehicle, they want money.

A lot of times they'll negotiate certain amounts for a lien release rather than be at risk of never recovering that vehicle. And even if they do recover the vehicle, there's a lot of cost involved. First, they have to spend $500 just for the repossession company. Then they have the transport and auction fees. In most cases, it's several thousand dollars to recover that vehicle.

So in lieu of that, if they can have some type of negotiated settlement with a debtor or even a subsequent owner, that may be more advantageous than paying out thousands of dollars for a vehicle of unknown condition or unknown location.