Posts Tagged ‘vehicle repossession’

If you’ve ever missed a car payment — or two — you may have been flirting with car repossession.

For car owners, vehicle repossession can be a stressful, confrontational and even violent experience. Recent accounts have reported on one 67-year-old retiree being shot and killed after confronting a repo man and two helpers who sought to reclaim his vehicle in the wee hours of the morning.

Now, a New Jersey auto finance company is using technology that makes car repossession unnecessary. By inserting a small device inside the vehicle, South Jersey Auto Finance of Glassboro simply transmits a cellular signal to the device remotely to disable the starter. The signal is activated after three days of nonpayment.

In an interview with National Public Radio, General Manager Mark Barr explained that while the newest devices transmit no advance warning of an imminent shutdown, customers are made aware of the device at the time they purchase the car. All of the company’s customers are considered high-risk borrowers, so all vehicles are outfitted with the device.

“Contractually, we have 10 days before charging a late fee, but we’re not looking for a late fee, we just want timely payments,” Barr said. Out of a little more than thousand accounts, Barr said, about 10 or 15 vehicle ignitions are disabled every week due to nonpayment of loans.

Since the beginning of the economic downturn, the tumbling stock market, a contracting job market and massive home foreclosures have occupied the nation’s attention. But there’s another effect of the ailing economy that’s just beginning to reveal itself: increasing car repossessions and the violent altercations occurring between repossesser and repossessee.

The economic slide and rising job-loss numbers increase the probability that consumers will default on their car loans, since most consumers will likely put a mortgage or rent payment before a car payment. Some analysts expect the number of repossessions to climb by five percent this year — on top of a nine-percent jump in 2007.¹ Others, however, predict a decrease in car repossessions because the number of financed cars has dwindled 32 percent since the recession began.²

But just because the pool of cars scheduled for repossession is shrinking doesn’t mean violent encounters over those cars will evaporate too. In fact, it’s quite the opposite. Car owners today — very aware that a sickly credit industry will make it much harder for them to replace a repossessed car with a new one — are desperate to hold on to the cars they already have.

While confrontation seems a natural aspect of the repossession process, the escalating resistance by some car owners is quickly turning the parties involved into casualties of the recession.

In a nearly unregulated profession, Joe Taylor, a repossession company insurer, warns the Associated Press, “If a guy is just put right on the street without training, the potential for violence is very, very high.”¹

When the dust settled on a dirt road following one such scuffle between 67-year-old retiree Jimmy Tanks and the men sent to repossess his Chrysler Sebring, one man was left dead and another charged with his murder.¹

According to reports, Tanks heard a noise outside his Alabama home late one night in June 2008, grabbed a gun and ran outside to confront the intruders. Who fired first and what happened next is less clear. What is clear is that a gunshot wound to the chest killed Tanks that night. Now, repo man Kenneth Alvin Smith awaits trial on murder charges for the 2:30 a.m. incident.¹

Since Tanks’ death in June 2008, two repo men also employed by Smith’s company have been involved in separate shooting incidents — leaving one wounded and the other dead.

With no end to the recession in sight, we’re only left to wonder if this violent trend will continue, and for how long.

Footnotes
¹ “Violence between repo men, car owners on the rise,” FoxNews.com, Feb. 27, 2009

² “The Recession’s Gotten So Bad, Even the Repo Man’s Singing the Blues,” Phillips, Michael M. Wall Street Journal, March 10, 2009