Is There a Difference Between a Repossession and a Charge Off?

By Deal Pack - 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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