Phoenix Auto Pawn Loans

The ultimate penalty for not repaying an auto pawn loan is repossession. Before it gets that far, however, most lenders will attempt to contact the borrower and collect payment. Because the car title used as collateral is usually worth at least twice as much as the outstanding debt, most borrowers exhaust all options to maintain possession of the pink slip.

How Repossession Works with Auto Pawn Loans

Unlike conventional pawning agreements where the pawn broker takes possession of the collateral during the loan, borrowers get to keep and continue to operate their auto as they repay a pink slip loan. That makes it harder for the lender to take possession of the collateral if the loan becomes delinquent. To recover the collateral, the lender must have the auto repossessed.

Some lenders require a duplicate set of keys to be submitted to make repossession easier, but this is illegal in Phoenix. When a car is repossessed without keys from the borrower, the lender usually has a set of keys cut using the key code found on the title slip or hot-wires or tows the vehicle. A repo man usually takes possession of a vehicle at the borrower's home or place of business.

If the repossessed auto is sold for more than the borrower owes, excess funds should be returned. If the car is sold for less, however, the borrower may still be liable for the difference under some agreements.

Anyone who wants to take out an auto pawn loan in Phoenix should contact Wilshire Consumer Credit. This lender offers flexible terms to help borrowers repay their loan conveniently and avoid repossession.