I have a bhph car lot. Two companies one for the dealership and one for the finance company. After the customer defaults and the vehicle gets repossessed we send out the default letter. If they dont redeem or want to pay the vehicle off. They go to auction. The ones we want back we bid on and bring back to the car lot. Its now getting to the point where auction fees are getting retarded to do it this way. What does everyone else do? I want to keep it 100% legit. Does it have to stay this way? Or can i throw a public auction and nobody shows up to buy it except my dealership?
Thanks for any advise.
This depends on your state. Every state is different in regards to repossession requirements.
If you tell me your state I may be able to get you some more information
We are in Minnesota. Thank you
I haven't dealt with BHPH in a few years, but you may want to advertise a public auction in a small county newspaper with very low distribution, sell them to a 3rd party and then buy them back. While it is technically legal as long as the vehicle sells to the highest bidder a court would likely view it as deception and order you to share profits with the bad debtor. Unless you're going for deficiency judgments it's unlikely to have it go that far, but the possibility would be enough to scare me out of it.
Stop giving away your profit!
Let me explain. When you take your car to auction you're going to get an auction sale (low bids). After that you're trying to try and collect the rest from the client by taking them to court, 99% percent of the time this will be useless unless your client has assets (very unlikely in bhph). If you sell it at auction for more than what the client owes the you actually owe them money!
Instead we use a foreclosure notice, if the client does not answer to our letter in 20 days then they have given up all rights to the vehicle and we can resell. That simple