On your own letterhead, write or print a notice that includes the delinquent customer’s name, address, and phone number. Explain that you have tried to contact them without success. Notify that they must contact you to reach a resolution of their pending payments.
List the vehicle in question along with its VIN number.
Provide an end date for the due date for all payments due (labeled “last payment date”) and the amount due to catch up (labeled “amount due now”). Explain that:
“If you pay the amount due now before the last payment date, you can continue the contract as if you were not in default. If you do not pay before that date, we can exercise our rights under the law, including involuntary repossession of the vehicle in which we have a security interest”.
Remember that as time passes until the due date you assign, more payments due can accumulate. Include in the letter that by the due date these payments will also be due and list each payment by amount and normal scheduled due date, i.e. “Due Date_______ Amount _______”
After listing these payments that will accrue by the final due date, explain that:
“In order to fully cure your account and to prevent the exercise of our statutory rights under the law, the payment(s) listed above must ALSO be paid in full on or before the last payment due date”
Let him know that even if the account is brought current, he still has the right to take action if payments are late again within a designated period of time:
“If you are again late within the next ____ weeks in making your payments, we may exercise our rights, including recovery, without sending you another notice like this.”
Explain your rights to collect more money owed under the bond agreement:
“The rights we may exercise under the law include repossession of the motor vehicle securing this debt. If the motor vehicle is repossessed, whether voluntarily or involuntarily, it may be sold and you may owe the difference between the net proceeds of the sale and the remaining balance due under the contract.
Ask the customer to contact you immediately if they have any questions.
Close the letter with:
“If we do not hear from you within ___days, we will have no choice but to issue a DELAY ORDER on the vehicle.”
Sign it and have it notarized.
Send the certified letter with the delivery confirmation and the requested return address. In this way, you have 2 ways to confirm and prove that you received the notice in case legal questions arise after the recovery.
You also get any forwarding addresses if the customer has moved so you can more easily locate the vehicle. The requested return address will send the letter to you if they moved instead of forwarding it.
If payment has not been made and you are ready to repossess the vehicle, you must write or type a REPOSESSION ORDER. This will indicate the following:
recovery order
Buyer:
[Name]
[Address]
[Phone number]
breach of contract
[vehicle year, make, model, VIN]
Net Pay Balance: [Total bottom line balance owed]
Repo Fee: [$ amount of the repo fee you charge]
Storage fee: [$ amount of the storage fee you charge]
Damage: [$ amount of any damage known to be done to the vehicle] You can also type TBD or To Be Determined here
Total – Add up all these amounts and enter the total here
The named buyer is in default of the installment loan agreement and payment is made in accordance with state and local uniform and commercial codes covering the installment agreement.
We agree to indemnify and save [your name/business name] harmless from and against all claims, damages, losses, and actions resulting from or arising out of our efforts, except as may be caused by negligence or unauthorized acts on the part of our agents representing us.
Dealer authorizing recovery
[your name/business name, address, and phone number here]
Notarize at the bottom
-Make a copy of the order for your records and give the order to your lien agent (the person who actually acquires the vehicle).
Note that –
* If you follow these steps you will have made a legal repossession.
* Many people do not send a notification letter because many times a customer will try to hide the vehicle once they have received a letter like this, especially if they have no intention of paying.
* Most people are unaware of their rights when it comes to vehicle repossession, so they generally don’t report someone who hasn’t followed the proper procedure; however, if you do not send the certified letter notifying them of your noncompliance and giving them an opportunity to make payment, they have cause to report you to the state DMV Dealer Services and the state Attorney General, which may result in a fine and prosecution for violating repossession laws.
* Please note that some states do not allow a private property repossession to take place if the repossession agent is asked to leave (some states require that you leave and that you obtain a court order).
* Some states have no restrictions on public ownership.
* Some states prohibit recovery at the customer’s place of business.
* Be sure to check the specific repossession laws applicable to your state.
