(WXYZ) — With the cost of living still high, many people are struggling to pay bills -- including auto loans. Unfortunately for some, that's led to a new trend — repo agents are getting more business.
At Rockwood Recovery in Roseville, Jenny Liagre the co-owner and current president of the Michigan Association of Repossession Agencies said business has been booming.
“Are you seeing a lot more repossessions right now than, say, you were even a few months ago?” I asked.
"Absolutely. Absolutely. Everything seemed to change at the end of May around Memorial Day. We just did double what we normally would do for June and July," Liagre said.
She points to the expiration of COVID-19 unemployment benefits last year and inflation.
"People have to make a decision. Are they going to make their house payment? Are they going to put food on the table? Or are they going to make the car payment?" Liagre said.
She said Detroit has always had a high auto default rate, but now she's seeing a rise in repossessions outside of Detroit.
“Which suburbs are you seeing more repossessions?” I asked.
“Places we wouldn't normally see them: West Bloomfield, Farmington, River Rouge, Ann Arbor," Liagre said.
Rockwood Recovery uses mobile-mounted license plate recognition cameras to scan for vehicles up for repossession. They can literally roll through a grocery store parking lot or a parking garage looking for vehicles up for repossession.
"Any place that they can find that vehicle and take possession of that vehicle without trespassing, they can do so," Ian Lynglip, a consumer protection attorney in Oak Park, said.
Lyngklip said repo workers cannot:
- Ask for assistance from police
- 'Break and enter' a closed structure (including your garage)
- 'Breach the peace' — which means making a loud noise or disturbance in the process.
If your vehicle is possessed, Lyngklip said you can redeem the property any time before it is sold, but sales can happen quickly at auction.
“Consumers are always entitled to redeem their property. But to redeem the property means you have to basically pay the loan,"Lyngklip said.
Most consumers can't afford to pay off their loan in full, or they don't want to go through bankruptcy to do it. So, Lyngklip's advice boils down to two points:
- Make your loan payments on time
OR - Ask your creditor for an accommodation in writing — such as an extension or a modification to your loan contract
That way when the repo man or woman comes knocking, you're protected.
Lyngklip said if you've been paying your loan on time, but a repo truck shows up due to a problem over financing, that may be what's called a "spot delivery" — where a dealership delivered your vehicle before financing was completed or approved by the bank. In that case, you should consult an attorney.
Bottom line, don't fall behind on your car payments. Used cars and trucks are in such high demand right now, dealerships or finance companies may be more likely to go through the hassle and cost of repossessing a car because they know it can be resold quickly — and probably for a much higher price.
