Buy Here Pay Here Repossession Laws

Buy here pay here car dealerships offer no credit or bad credit loans, but they can also act as the finance company. Since BHPH auto dealers are acting as seller and lender they can have different terms than traditional lenders but still must follow the Truth In Lending Act (TILA). Under Regulation Z, 1. a lender must disclose the cash price of the vehicle, 2. the lender must disclose the amount left to be financed, and 3. the lender has to disclose any other portions of money that have been charged or will be retained by the lender.

Repossession of Property

According to AZ Law Help financing happens when you purchase something but do not pay the full price and a creditor lends the remaining amount of money allowing for payments to be made over timeYour creditor will act as a guarantor and will take a security interest since they will take over the remaining debt owed. By Arizona law, if a debtor does not pay back their loan on time repossession may occur to recover the remaining amount owed. First, a notice will be issued informing you of the date and time a hearing will occur allowing you a chance to explain the situation to a judge and whether or not your vehicle will be repossessed. Under Arizona Law, failure to return the vehicle after a court order has been issued it can result in a Class 6 Felony.

Penalties for missed payments and repossession

The most common penalty for a missed payment is a fee but a pattern of missed payments can lead to a repossession of property. Regardless of the penalty, a creditor must follow the law and these laws can vary based on city, county, and state. In the case of Arizona, the Navajo Nation has its own set of laws governing repossession and missed payments.
Several states allow for a vehicle to be repossessed the day you default on your vehicle loan with or without prior notice of the repossession. Once a vehicle is repossessed the guarantor will attempt to collect the monies owed on the vehicle by having a public sale of the vehicle. If the sale of the vehicle does not recover the full amount owed on the loan you could be issued a deficiency judgment meaning you still owe the remaining balance. According to the FTC in some states, a deficiency judgment may be overturned if a “breach of peace” has occurred typically meaning some type of physical force was used against a person or property like unlawfully entering a locked garage.

What should I do if I miss a payment

Everyone understands that life can be tough sometimes and even the best intentions can sour meaning creditors are no different. When you miss a payment it always best to contact your creditor and explain the situation as some may have programs in place for things like being laid off from work or an emergency medical situation. Even if neither of these situations is happening to you it is in the best interest of all parties to work together and come up with a plan that works for everyone. Creditors can work with you to lower your payments or give you an extension on an existing payment plan since a repossession is timely and costly for everyone involved.

Other options could be refinancing the entire loan with a different lender like a bank or credit union. Another option would be to take money out of savings or asking family members to borrow enough to bring the loan out of late status.

Options if your vehicle is repossessed

Repossession is a last ditch effort on behalf of the creditor, but you still do have rights and it may be possible to have your vehicle returned.  In many states, your property inside of the vehicle like personal computers, phones, or important paperwork must be returned undamaged upon request. There may have been issues with the repossession process like having a repossession happen after the statute of limitations or the car sold for an absurdly low amount of money. Since laws can vary greatly on location and situation it is best to contact a lawyer for legal guidance.

Find A Buy Here Pay Here Dealership In Phoenix, Arizona

If a bank or credit union lender doesn’t want to loan you money for a vehicle because of your credit, BHPH dealers are pleased to put you behind the wheel today. If you live around the Phoenix, Arizona area and are wondering if a buy here, pay here car dealer is the right choice for you, stop by In-Power Motors. We are a buy here pay here dealership in Phoenix, Arizona ready to get you in a car today!

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