What if a Repo Company Damages My Car?

If a repossession company damages property it is repossessing, the company is liable for the damage.  It is responsible for costs to repair or replace the property. 

Who is Responsible for Damaged Property Resulting from Repossession?

If an owner misses payments, the lender can repossess the property purchased with the loan. Usually, the owner must miss several payments before a lender repossesses the property. They will then use a repossession company to retake possession of the property. If the repossession company damages the car, it is legally responsible. Because the lender legally owns the property after repossession, it is responsible for recovering the costs of repairs from the repo company. The lender might decide to pay for the damages itself, but it will likely attempt recovery from the repossession company.

Is the Owner Ever Liable for Damages?

The original owner is rarely liable for damages to the property during the repossession process. Many states allow a repossession company to pass on any costs incurred during repossession to the original owner. However, this law would not apply to damages caused by the repossession company. Repo companies typically do not have to damage property during repossession. Therefore, any damage would not qualify as an incurred cost. The only exception is if the original owner is responsible for the damage caused during repossession.

How Can an Owner Recover Costs for Property Damages During Repossession?

If the original owner reclaims his or her property and it is damaged, he or she can recover the damages from the repossession company. However, the original owner may have a more difficult time than the lender recovering from the repo company. The original owner can attempt to collect by:

• Sending all bills or estimates to the repossession company to see if they will be cooperative and pay.
• Filing a claim with his or her insurance company. The original owner will have to pay the deductible, but the insurance company will try to recover the costs from the repossession company. If the insurance company is successful, it will refund the deductible.
• Filing a collection agency lawsuit to recover damages from the repo company. In this case, the lender might intervene since they have an interest in having the property repaired. If the lender joins the case, it will provide additional resources for the lawsuit. 

If an owner has questions about who has responsibility for damaged property, he or she can contact an attorney to explore the options.