When you take on a lease, you typically sign up to pay a certain amount by a certain date every month for a period of time. At the end of the lease, you return the car to the owner. Leases are unique because the company you’re leasing the car from retains the title, meaning they own the car. You’re essentially just borrowing it from the company that holds the title.
A lease can be a good choice for many people, especially those with a high FICO score who are looking for a low monthly cost, but there is a catch. If you aren’t able to pay your car bill, you run the risk of having it repossessed. Car repossession is not something anyone wants to deal with, but it’s an unfortunately common occurrence, so it’s important to know about it.
Because the leasing company owns the title to the car, the car is legally theirs the entire time the individual has it. The car owner and the car leaser simply come to an agreement that the leaser can use the car. However, if the leaser breaks the agreement—for example, by not paying their car bill—the leasing company is allowed to take their legal property back. This is car repossession, and it may happen at any time if the leaser doesn’t stick to the agreement.
In most states, as soon as a leaser doesn’t make a payment on time, the leasing company has full legal rights to repossess the car. That means even if a payment is late by a single day, the leaser runs the risk of losing their car. However, in practice, it is possible to have a clause in your lease that gives you a few days’ buffer, albeit with a late fee, or waives one late payment throughout your lease.
Most of the time, leasing companies get third parties to do the repossession process. However, some companies may have repossession experts on staff who can go out and repossess cars. Either way, leasers typically won’t be able to negotiate with the repossession officer; talking to the company itself is usually the only way to negotiate that.
There are some legal rights that each party has when it comes to car repossession. Here are some of the rights the leasing company may have:
Although there are fewer rights that the leaser has, the leaser does still have some rights. That may include:
One of the biggest problems that may arise for a car leasing company is trying to repossess a car when they can’t find the individual who’s currently owning the car. If you’re working for a car leasing company that’s trying to repossess a car, Enformion’s skip tracing services can be immensely helpful in finding an individual and repossessing a car with little to no hassle.