Overhaulin'

Legal question re: car title loan/impound?

My boyfriend and I took a title loan out on our fully paid off SUV. We pay interest only every two weeks, with a balloon payment at the end of six months. Last week my boyfriend got pulled over and the Phoenix (AZ) police impounded his car. Because the title loan company has a lien on our car, they were contacted, and they paid to get the car from the impound lot. Now they're trying to say that we have to pay them every cent plus a bunch of extra fees totaling approx $1,900 (the loan was for $1,000 btw)-and they want us to pay it NOW or they're threatening to keep the vehicle. We are not behind on our payments; the next payment of $67 is due Friday. We haven't defaulted on the loan, but I know these companies have tons of ways they work around state laws and loopholes. We are in Maricopa County, Arizona. Does anyone know if the loan company is in the right here? Thank you.

Public Comments

1. When you took out the new loan on the car, you granted the payday place a secured interest in the vehicle. A secured party is allowed to take any reasonable steps to safeguard their interest (ie, pay to get the car out of impound) and then demand you pay those amounts. By "allowing" the car to be impounded, you broke your agreement with the payday place. Now they are perfectly within their rights to demand you pay off the entirety of the loan and the costs of the impound. If you don't, they'll sell it free and clear of your interest in the vehicle - hence why they call it a "title" loan.
2. They are probably on the legal high ground here, although they are obviously scum-sucking pigs for doing this. Buy/beg/borrow the money and get you car back. I don't know how long they are required to keep the vehicle before they can legally sell it to recover their loan... it should be in the contract you signed to get the loan. They will sell the car off about 15 seconds after they are allowed to do so!