Making the Most of Repossessed Trailers
In recent years, it has become increasingly easy to find repossessed trailers due to the economic challenges facing our country. Trailer foreclosures occur when the borrower falls behind on payments. When this happens, the bank determines whether or not the borrower will be able to continue with the payments; if not, then the bank starts the foreclosure process. Before the foreclosure is complete, the borrower can still redeem the trailer by paying the loan amount in full. However, once the foreclosure is complete, the borrower no longer has any claim to the trailer and the bank assumes full ownership.
Even when foreclosure seems imminent, the borrower still has some options. First, the borrower can try to renegotiate with the lender for a lower interest rate or an extension of the loan repayment period, either of which will reduce the amount of the monthly payment. Another option is to try to negotiate a short sale. In this case, the lender would agree to sell the trailer at a lower price and therefore take a loss on the trailer to recover at least part of the loan amount. Finally, as a last resort, the borrower could declare bankruptcy.
If the borrower is unable to negotiate with the lender and does not want to file for bankruptcy, the likely outcome is foreclosure. Although unfortunate for the borrower, a repossessed trailer can be a great deal if he is looking for a new trailer. All new trailers depreciate as soon as they leave the lot, so there’s already a 30% discount when you buy a used trailer, even if it’s only a few months old. Also, when a trailer has been repossessed and then repossessed by the bank, the bank must get rid of it as quickly as possible. This is because the trailer has become a financial and commercial liability for the bank. Because the bank is not looking to make a profit, they will sell it for well below its value, just to make sure it sells. Not only does the bank have to pay storage fees for the trailer, but the remaining loan amount on the trailer subtracts from what the bank can lend, reducing its ability to generate income.
To find repossessed trailers, you can go to a dealer or go to a bank auction. You’ll get a better deal at a bank auction, but you’ll probably have to do some research to find one. Either way, you will save significantly on a trailer in excellent condition when you purchase a repossessed trailer.
