The Expert Podcast

• What is a Zombie Vehicle?
  • Zombie vehicles refer to cars in a "zombie limbo" title status, stuck in a legal deadlock with no clear ownership or registration.
  • These vehicles are piling up in parking lots, towing lots, dealership backlots, and even individual driveways.
• How Do Zombie Vehicles End Up in Limbo?
  • These vehicles are often in some stage of loan default, where a loan was paid off but the title never updated or transferred.
  • Lenders sometimes choose not to repossess or recover the vehicles, leaving them stranded.
• Why Don't Lenders Want the Vehicle Back?
  • Lenders often don't want to take back the vehicle due to the cost of repossession, storage, and maintenance, as the recovery value is often too low.
  • In many cases, the cost of repossession and legal procedures outweighs the car's market value.
• Impact on Borrowers and Towing Companies
  • Borrowers are left with vehicles they can’t title, register, or sell.
  • Towing companies are stuck with vehicles they can't process because they don't have the legal authority to handle title transfers.
• Towing Companies and the Struggle with Zombie Vehicles
  • Towing companies are caught in a tough spot when they tow vehicles with expired registrations or liens.
  • They can’t sell, store, or title the vehicles because the lien holder is not willing to take action.
• The Towing or Mechanic's Lien Process
  • Towing companies can file liens on the vehicles, but the process is complex, time-consuming, and often not worth the effort.
  • The lien process can take months, involving legal notifications and auctions, but even then, it may not result in ownership transfer due to objections from the lien holder.
• Impact on the Used Car Market
  • Zombie vehicles are clogging up the used car market by preventing the sale, trade-in, or registration of cars that could otherwise be sold.
  • The presence of these vehicles affects both buyers and sellers, preventing the movement of used cars and causing a backlog.
• The Role of the Lien Holder
  • Lien holders benefit from not having to store or manage the vehicles, while still having leverage over the borrower to collect payments.
  • However, the borrower suffers because they don’t have access to the car and can’t renew registrations or make repairs.
• Challenges in Title Processing
  • Zombie vehicles are creating a backlog in the title processing industry.
  • Mechanics liens and towing liens are often rejected due to complex legal requirements, further delaying the transfer of ownership.
• The Ongoing Issue of Zombie Vehicles
  • The issue of zombie vehicles is becoming an increasing problem in the automotive industry, with no easy solutions in sight.
  • Lenders, borrowers, towing companies, and title processors are all affected by this complex issue.