Monday, October 1, 2012
Help Me Howard: Car Repossession
She says she never missed a car payment. But her car still got repossessed, and her lender says they have a good reason for doing so. It's tonight's, Help Me Howard with Patrick Fraser.
Alicia Heard: "I'm like, 'who would want to steal my car?' I didn't understand who would want to steal my car."
Alicia's car wasn't stolen but it was gone. Repossessed, even though she was current on her car payments.
Alicia Heard: "It wasn't repossessed because car payments, it was repossessed because of auto cancelation."
Alicia said money was tight and she couldn't afford the car insurance when it was due.
Alicia Heard: "I'm a single mother, so I had to use the payment for something else."
And the day the car was taken she was actually searching for a new policy.
Alicia Heard: "I have never heard of them repoing a car because of insurance."
Having your car repossessed in front of your co-workers will embarrass you. Having to pay to get it back, will break you."
Alicia Heard: "I have to pay $600 in recovery fees on top of my $250 payment for September, and put down $400 for insurance. So that's a total of $1400."
Alicia doesn't have the $1400 and is finding out just how important that car was to her.
Alicia Heard: I have a 2-year-old daughter who I have to take back and forth to school, to doctor appointments and to other things that we have scheduled."
Speaking of her 2-year-old, little Akivia did make Alicia smile, when she offered to help.
Alicia Heard: "She said, 'Mommy they took your car?'. I said, 'Yes baby they took my car but I will try to get it back.' She said, 'Mommy I will buy you a new one.'"
But laughter aside, Alicia is upset. She was current on her car payments, but late on insurance.
Alicia Heard: "So it's very frustrating to me. I'm just trying to cope with everything and hopefully get an answer if this is legal or not."
So Howard, can a car company you are paying, repo a car from you if you fall behind on your car insurance?
Howard Finklestein: "Legally a lender can force you to have insurance to protect their loan in case you wreck the car. And when you buy a car, you normally sign a document that they have a right to repossess the car if you don't carry the required comprehensive and collision insurance."
When we called the car dealer that financed Alicia's car, they told us she signed this document that says she understands they can repossess her car if she doesn't carry the proper insurance.
They also said they called to warn her they were going to take the car back. Alicia said she didn't get the call and didn't see the insurance document .
Howard Finklestein: "However, I don't remember signing anything that said that."
The dealership did offer to work with Alicia so she could get the car back without having the pay the $1400 in one lump sum. But Alicia still can't afford that, and is giving up her car, after learning a very expensive lesson.
Howard Finklestein: "Read your contract, ask questions, look in the fine print, read the fine print, have someone else read the contract."
Read all that paperwork, that is so important. Whether it's a home, a car, or any purchase, take your time and read everything.
Often, the salesman said it's a standard contract. You don't have to read it, but you do. And one more thing, get a copy of all the paperwork on the spot. Don't let them tell you 'we will mail you a copy later.'
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