Need ADVICE My Son Stopped Paying On His Car Loan 2 Years Ago and Has Car the In Storage

[Shi1]

My son who is an OTR truck driver financed a car through Santander about 3 1/2 years ago. It was his first brand-new car and he made payments on time for about the first year and a half, then he got into a tight spot. He stopped paying altogether, and the car has been sitting in a storage unit not driven for the last couple of years. He still owes almost $15,000 on the car loan. 

According to his credit report the debt has not been sold to a collection agency yet, and is still with Santander. He wants to start driving the car again and my advice was contact Santander to work out some kind of payment arrangement. Is that really his best option? I'm just guessing it is.

His credit score is right about 590ish. The loan could get sold at any time I think, so I'm looking for advice on what would be the best way for him to fix the mess he made for himself. 

Yeah he's an idiot, we've already been over that subject :-)

[Anonymous]

@Shi1  Because of how long ago this delinquency happened, I believe the creditor would jump at the opportunity to settle. My advice is to settle the account for a fraction of the balance. If he settles, his credit reports will be updated to reflect paid/settled for less than full amount. He will be free and would no longer have to look over his shoulder, and he would get to keep the car.

[Brian_Earl_Spilner]

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@Anonymous wrote:

@Shi1  Because of how long ago this delinquency happened, I believe the creditor would jump at the opportunity to settle. My advice is to settle the account for a fraction of the balance. If he settles, his credit reports will be updated to reflect paid/settled for less than full amount. He will be free and would no longer have to look over his shoulder, and he would get to keep the car.

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Not really. I worked loss mitigation for chase and HSBC. Our goal was to get them back on regular payments and only take the car if we have to. I personally have never settled an account. It almost never makes fiscal sense. And with the used car market being what it is, it makes even less sense when the vehicle can be repoed and sold.

[Bill77]

How do you repo a car that has been in storage for 2 years and presumily the bank can't find it?  I've never heard of a bank waiting 2 years without payments before starting the repo process. Sure they can file a lawsuit but that's expensive.  

[Brian_Earl_Spilner]

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@Bill77 wrote:

How do you repo a car that has been in storage for 2 years and presumily the bank can't find it?  I've never heard of a bank waiting 2 years without payments before starting the repo process. Sure they can file a lawsuit but that's expensive.  

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Well, first thing is seeing if it's illegal to hide the vehicle in their state. Then take the party to court to get a replevin. Pass the legal fees along. If they don't comply, have the courts enforce the judgement. 

It's actually not hard to hit 2 years without a repo. By the time accounts hit my desk they were typically 120-180 behind. Depending on how worked the accounts were or the value of the cars, I might work them another 1-3 months before either repo or shelving them for a bit. If I ordered repo, then they gotta find it. If they can't find it, we may hire a private investigator to locate it. Once we find it, start the legal process. So you can see, once the fees start adding up, it may not be worth going after. We're not even talking about location, hookup, storage, transport, and auction fees yet.

[Shi1]

If the whole repo thing can be avoided I think he would prefer that. He just wants to know what the best course of action is to make things right. That way he can get the darn thing out of storage and start using it again. 

[Anonymous]

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@Shi1 wrote:

If the whole repo thing can be avoided I think he would prefer that. He just wants to know what the best course of action is to make things right. That way he can get the darn thing out of storage and start using it again. 

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Several years ago, a family member was in the same situation. She defaulted on an auto loan. Years went by and the car was never repossessed because she was living off the grid. She asked for my help, and I negotiated on her behalf with the creditor. I negotiated a settlement for pennies on the dollar, and got it all in writing. I negotiated completely by email to ensure everything was recorded. She then paid the small settlement in exchange for the car title, and her remaining debt was forgiven. Her credit reports were then updated to reflect: paid/settled for less than full amount.

I realize when logged into an online forum, you really have no idea who you're talking to on the other end, and if their advice can be trusted. I enjoy sharing secrets I've learned over a lifetime. Wishing you the best.

[Shi1]

AFI, What you just described that you did for your relative would be ideal. But I don't how to make that happen, and my son is a lousy negotiator. He's good at a lot of things but Negotiating is not one of them. If I knew you, we might could work something out if you're the real deal. You are a pretty popular fella around here, that says a little bit.

[Anonymous]

@Shi1 wrote:

AFI, What you just described that you did for your relative would be ideal. But I don't how to make that happen, and my son is a lousy negotiator. He's good at a lot of things but Negotiating is not one of them. If I knew you, we might could work something out if you're the real deal. You are a pretty popular fella around here, that says a little bit.

You're kind. So the first thing you do is gather all his information about the car, and have a letter, signed by him, giving you permission to negotiate with the creditor on his behalf. It's nothing fancy, just a hand written or typed note with his signature. Then contact the creditor collections department by email only. They will ask to talk on the phone or in person, etc. But you refuse, and offer no other option but to negotiate by email. Be firm and professional in your emailed negotiations. And keep in mind, they do not want the car. They do not want to go to court. They want cash. And they want to close their books on this old delinquent account. You have the upper hand. ***ModCut - Not here please***. You control the negotiation. You control the conversation. You control the deal. When they try for more, walk away from the negotiation. Accept nothing less than a reasonable settlement price in exchange for the car title. Do not feel bad for negotiating the best possible deal for yourself. They are doing the same on their side. Just remember, all they want is cash, and to clear this account from their books.

[teekay629]

I am kind of shocked that no one mentioned the fact about how long it has been sitting. If it has not been started regularly for years, it may not be the best idea to start driving it again. I had a car sit for a couple years since it was given to me for when I would turn 16 and my one job was to start it every now and then. Clearly, as a kid, I did not do that. When I was ready, it took a lot to make it moving again and for years, we kept breaking down and having to replace the belt since it would come apart.

I would definitely think of how much money and work needs to go in (and possibly long term) to make it working again. That might help figure out if you want to negotiate start making payments again or to settle for next to nothing just to clear the name.