Basically, the lender owns your car until it is paid in full. Therefore, one missed payment is considered a breech of your agreement. It gets worse. After they take your car, they can sue you for what is called deficiency. Deficiency is any amount still owed on your contract AFTER your lessor sells your repossessed vehicle at--let's say--an auction. Often they sell the car for less than they expected you to pay to get your car back. What do they care if they are going to sue you for the difference anyway?

I'll explain it this way: Imagine paying $18,000 for a vehicle over time with maybe $5,000 left before the car is yours. You lose your job and fall behind a couple of months with the payments. Your vehicle gets repossessed. Now you must pay triple the amount of the two months you were delinquent because of added repossession and storage costs. You cannot come up with the money, so your car is sold at an auction for $1,500. The worst part: you are sued for the remaining balance of $3,500, plus the repo costs! What is the point of this? If they are going to sue you for the unpaid balance anyway, why not just give you the opportunity to pay the bill? Wouldn't they come out better in the long run? Duh!

The repo man doesn't care that your finances are in limbo because you have recently divorced or that your employer informed you in the eleventh hour that you were being laid-off. The repo man only cares about the fees that they will receive once they recover your vehicle. So, you must protect yourself.

Here's an old fashion remedy for fighting the Repo man: If you know you will be able to come up with the money needed to pay your outstanding car note in a couple of months or so, switch cars with a friend until you get your finances straight. Better yet, HIDE IT in someone else's garage for a while. Make sure it is someone you did not list as a reference on the credit application because the Repo man will definitely check their addresses in search of your vehicle.

I know a guy who switched cars with his brother who lived in a different state. Within three months, he straighten out his finances and paid his three month delinquent car note to date, plus late fees. He saved himself the high cost of repossession and storage fees, deficiency costs, and the embarrassment of having his car repossessed (neighbors do watch).

The trick is to stay a step ahead of the repo man. Know their moves before they strike. This will help you prevent repossession, and the expense that goes along with it.