Vehicle Repossession Processing SOP

Standard procedure for verifying loan default, authorizing vehicle repossession, issuing right-to-redeem and deficiency notices, and coordinating collateral remarketing in a compliant, documented workflow.

Steps

• Verify the loan is in default
  The collections specialist verifies the account status, payment history, grace period, cure attempts, and any bankruptcy, cease-and-desist, or active dispute flags. The specialist documents the default basis in the loan file and confirms that no hold prevents repossession.
• Review legal and policy restrictions
  The compliance officer reviews the account for legal restrictions, state-specific notice requirements, and internal approval thresholds. The officer records whether repossession may proceed or must be escalated for legal review.
• Escalate the non-conformance
  The compliance officer places the account on hold, records the reason for the non-conformance, and routes the case to legal counsel or the designated compliance approver. The officer does not authorize repossession until the hold is cleared.
• Authorize the repossession order
  The repossession coordinator completes the authorization form, confirms the approved vendor assignment, and transmits only the minimum necessary account and collateral information required to recover the vehicle.
• Confirm collateral recovery and intake
  The repossession coordinator verifies the tow receipt, VIN or other vehicle identifier, storage location, and intake condition report. The coordinator records chain-of-custody details and attaches supporting documents to the account file.
• Send the right-to-redeem notice
  The loan servicing representative generates the right-to-redeem notice, confirms the redemption amount and deadline, and sends the notice using the approved delivery method. The representative records the date sent, tracking number, and a copy of the notice in the file.
• Monitor redemption activity
  The collections specialist monitors the account for full redemption payment, cure activity, or borrower contact through the redemption period. The specialist updates the file immediately if the borrower tenders the required amount or requests payoff clarification.
• Determine deficiency and send deficiency notice
  The repossession coordinator or collections specialist calculates the deficiency by comparing the sale or disposition proceeds against the outstanding balance and allowable fees. The specialist obtains required review approval, then sends the deficiency notice and retains the calculation worksheet in the file.
• Record remarketing and close the file
  The compliance officer confirms that all required notices, approvals, recovery records, and disposition documents are complete. The officer closes the repossession case, updates the account status, and archives the file according to retention requirements and ISO 9001 documented information controls.