Vehicle Impounded

[CreditFun]

Asking for a friend. 

Car loan with Capital One. 

Car impounded. 

Fee to get it out is almost as much as car is worth. 

Can someone just leave car impounded and keep making payments? 

What would negative impact be on credit report?

[Cowboys4Life]

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@CreditFun wrote:

Asking for a friend. 

Car loan with Capital One. 

Car impounded. 

Fee to get it out is almost as much as car is worth. 

Can someone just leave car impounded and keep making payments? 

What would negative impact be on credit report?

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If they do not retrieve the car then the county/state moves to auction it.  Cap1 having a security interest in the vehicle would have first rights as the lien holder.  The state mandated exemption would go to the owner and the rest of any proceeds to Cap1 as the lien holder if they don't purchase is out of auction (not likely).   Any fees/repo costs etc. Cap1 would tack on to the loan.  The other problem is with the loan contract may specify that under this kind of circumstance the right of acceleration is triggered meaning the entire remaining balance comes due.

Yes, it could have a negative effect on their credit reports.  I highly suggest speaking to a lawyer ASAP.  It may be possible to get the car and make payments to the state.  Another plan would be to contact Cap1 immediately and negotiate a settlement of the remaining balance.

[micvite]

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@CreditFun wrote:

Asking for a friend. 

Car loan with Capital One. 

Car impounded. 

Fee to get it out is almost as much as car is worth. 

Can someone just leave car impounded and keep making payments? 

What would negative impact be on credit report?

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Technically as long as it doesn't go to auction which it should after 30-120 days depending on statute, you could. 

What I want to know... is what kind of car isn't worth the tow bill to get out of impound and still has a loan on it?

[sarge12]

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@CreditFun wrote:

Asking for a friend. 

Car loan with Capital One. 

Car impounded. 

Fee to get it out is almost as much as car is worth. 

Can someone just leave car impounded and keep making payments? 

What would negative impact be on credit report?

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Sure you could, but the impound lot would eventually sell it at auction to be paid for the wrecker and storage fees. Just what kind of car that still has payments is about the same impound fees as value. I think the lienholder has first dibs on the sale. A clear title must be obtained if it is ever to recieve plates in most States. They could only sell it after the lien is satisfied. Now if it has no lien, they could get scrap metal and used parts from it.

[CCrew]

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What I want to know... is what kind of car isn't worth the tow bill to get out of impound and still has a loan on it?

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I could think a heavily wrecked one without active insurance and no GAP or one where GAP bailed  on it  due  to no active insurance.

In a case like that the state would require proof of insurance to get it out of impound in addition to any associated fees. 

Not saying that's the case, but certainly a scenario. 

[NRB525]

Is there an update on friends' car?

Asking for the community.