> It's odd to me that they repo'ed rather than contacting him to say 'hey, there's a problem with your account.'
I imagine there's a lot more money to be made making someone pay for the fees and costs of a repo, than a phone call asking them to pay a few dollars. Although his friend could also be lying about the few dollars part.
That would be an insane practice. The internal overhead is a pain. Repo is a last effort to protect the asset rather than a way to cure an account. Even with repo fees there's no guarantees you're getting that money back and the asset won't be worth as much if the customer doesn't true up.
General industry practice people are put in delinquency buckets, and generally not by amount but in the 'are they past due or not?'
I'm speculating but there could be other behavioral scoring as well and if they just automated the process of dispatching well... that's on them and good luck with that overhead.
I’m fairly convinced a lot of places give loans with horrific interest rates hoping person defaults. They repo the car. Resell it. The person usually has only mostly paid interest and still owes most of the original price of the car plus fees.
I imagine there's a lot more money to be made making someone pay for the fees and costs of a repo, than a phone call asking them to pay a few dollars. Although his friend could also be lying about the few dollars part.