Can a Car Dealership Repossess Your Vehicle While Servicing it at a Mechanic’s Shop?

Several years ago, I had a customer’s minivan in my shop to replace head gaskets and possibly two cracked cylinder heads, totaling about 3500 in work. I was just getting started disassembling the engine when this gentleman came in with an order to repossess the vehicle.

Unlike many first thoughts, the mechanic's lien takes precedence in Texas and many other states over the creditor's claim, especially when the lien is for services rendered. The repo guy knew that, and his order was conditional. I was not about to let this repo guy and his order waltz out of the shop unless I was paid for the work I had performed. The repo guy knew this and asked me to stop work on the car and wanted to know how much in parts and labor I had tied up in the car at that point. I told him about 375, which he paid me, and I let him haul the broken piece of junk off.

The repo order stated that the people only owed 550 on the vehicle but were 3 months behind on payments. I guess the bank was happy to get a non-running POJ (Project On Going) that needed 3k worth of work to run rather than let the owner dribble in the 550 they owed and deal with the repairs.

The Mechanics' Role in Repossession

That scenario would largely depend on your mechanic. The likelihood that he would release your car to anyone other than you, just because they ordered it, is slim. Mechanical work typically takes precedence over creditor demands, as the mechanic has a lien on the car until the work is paid in full.

However, while the car is on a lift, repossession is not likely to occur. Shops are not the most ideal places to repossess a car from, but that doesn’t mean it won’t happen. Mechanics can work in collaboration with the bank to hold the vehicle until the bank can come repossess it. While the car is at the shop, the bank would have no reason to retrieve it until the job is completed and payment is made.

Legalities and Financial Implications

It’s important to note here that even if you are financing a car through a bank like Chase, the car does not belong to you until full payment is made. The bank owns the vehicle. So, if you are servicing a car under an agreement to return it to the bank (even if it has financing from Chase), it is more the bank’s car, not yours.

While it is true that the debtor is responsible for the car, certain activities, such as getting a root canal, registering your vehicle, or having your appendix removed, do not preclude the car from being repossessed by the bank. Likewise, the car is not safe from repossession while it is not yours. Trust in the mechanic shop to ensure that work is paid for before the car is released. In the case of continued financing through Chase, the bank’s agreement with the dealer dictates what happens at the shop.

Conclusion

While mechanics do have the right to hold a car if work has been performed and payment is not made, the bank retains the ultimate right to reposside a car under financing agreements. Always ensure that you are current on payments and that the mechanic shop you are using is in compliance with the terms of your financing agreement. Conflicts can be resolved in court, but the best approach is to stay on top of payments and maintain clear communication with both the bank and the mechanic shop.