If I have a car loan, can the lendersend me a billif the vehicle has beenrepossessed?
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If I have a car loan, can the lendersend me a billif the vehicle has beenrepossessed?
Wanted to buy my leased vehicle as I was already over the lease mileage by 20,000 and still had 14 months to go. Told them I couldnot afford and wanted to buy out lease. Would not let me or 2 car dealerships. They repoed the vehicle and sold at action for $6000. They would not sell to me for $18,000. They now sent a bill, which has gone to collection, for $11,000. Am I responsible for this bill on a repoed vehicle? I need you legal help in this matter.
Asked on November 27, 2010 under Bankruptcy Law, Michigan
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
1) Unless the lease agreement gave you the right to buy out a lease mid-term, the dealership(s) were not obligated to let you do this; if you lease agreement did give you that option, then they had to let you buy out the lease (assuming you had the money up front to do so; they would still not be required to finance you) and you would have a cause of action against them for their not doing so.
2) If they defaulted on payments under the lease, they could repossess the car; however, if you were still current on payments and had not otherwise materially breached (or violated) the lease, they could not repossess.
3) If the car was repossessed, they had a right to sell it at auction for whatever it would fetch. What it brought at auction will then be applied against the remaining amount you would owe under the lease, including any mileage overage. You are liable for that remaining amount, and if you don't pay it, they can legally sue you for it, if they choose.
In short, while you have whatever rights the lease gave you, you also had all the obligations under it, including paying for the full lease term and mileage overage.
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