By Amir Dabiri - April 22, 2013
That’s an excellent question, and the answer is yes. There is a very distinct difference between the two terms.
A repossession implies that the vehicle has been recovered or returned to the financier. In this scenario, the vehicle is appraised and given an ACV or Actual Cash Value. The customer’s loan balance is reduced by the ACV, essentially giving them credit for the vehicle return. The remaining balance is written off as a repossession loss.
A charge off implies that the vehicle has not been recovered. The customer’s entire loan balance is written off as a bad debt.
In either case, the customer can be charged for fees incurred for recovery or attempt to recover the vehicle as well as repairs required to resell the vehicle.
Deal Pack’s dealer management software easily accommodates either scenario in one simple function. Please contact a support representative to show you how.
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Since 1983, ABCoA has helped buy here pay here used car dealerships and subprime finance companies eliminate duplication, remain compliant, and achieve success with complete, customer-driven software and dependable support. Customers properly using Deal Pack have never lost an IRS audit.
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