Version 1.0
Prepared by: @Lorraine Sebata
Approved by: @Lashanda Mackey
Reviewed date: 2025-09-04
Next review date: 2026-09-04
This SOP outlines the standardized procedure for the efficient and compliant intake, assessment, documentation, and recording of repossessed vehicles into the company's inventory. Its purpose is to ensure proper asset management, accurate valuation, legal compliance, and preparation for subsequent disposition (e.g., auction, sale).
This SOP applies to all staff involved in the repossession process, including but not limited to Loan Officers, Operations Department personnel, Finance Department personnel, and designated Inventory Management staff. It covers all vehicles repossessed due to loan default.
Credit and Loan Approval Policy - Specifically, sections on default and recovery.
Recovery Agent: Responsible for the physical repossession of the vehicle, initial inspection, securing the vehicle, and transporting it to the designated storage facility.
Finance Officer: Initiates the repossession request based on loan default, provides relevant loan and client information to the Recovery Agent, and ensures proper communication with the defaulting client (as per Credit and Loan Policy).
Operations Department: Oversees the entire repossession and inventory intake process, coordinates with Recovery Agents, manages storage, and ensures compliance with this SOP.
Collections Department: Responsible for recording the repossessed asset in the company's books, determining the book value, and tracking all associated costs.
Legal Department (if applicable): Provides guidance on legal aspects of repossession, ensures compliance with local laws, and handles any legal challenges.
External Valuer/Mechanic (if applicable): Provides independent valuation and mechanical assessment of the repossessed vehicle.
5.1.1 Upon receiving a valid repossession order from the Collections Department, the Recovery Agent proceeds to the vehicle's location.
5.1.2 Physically repossess the vehicle in a safe and legally compliant manner, ensuring all local regulations are followed.
5.1.3 Conduct an immediate preliminary visual inspection of the vehicle's exterior and interior, noting any obvious damage, missing items, or personal belongings.
5.1.4 Secure the vehicle by ensuring all windows are closed, doors are locked, and the vehicle is immobilized if necessary.
5.1.5 Transport the vehicle to the designated secure storage facility.
5.2.1 Upon arrival at the storage facility, the Recovery Agent hands over the vehicle to the designated Storage Facility personnel.
5.2.2 The Operations Department personnel, in conjunction with the Recovery Agent, complete the "Vehicle Repossession and Intake Form" (Appendix A). This form will detail:
Vehicle make, model, year, VIN, and license plate number.
Date and time of repossession.
Location of repossession.
Condition of the vehicle (exterior, interior, odometer reading).
List of any personal belongings found in the vehicle (to be cataloged and stored separately).
Name of the Recovery Agent and Operations personnel present.
5.2.3 Take clear, date-stamped photographs of the vehicle from all angles, documenting its condition, including any existing damage.
5.2.4 Store any personal belongings found in the vehicle in a secure, labeled container, awaiting client notification and retrieval as per company policy.
5.2.5 Input all vehicle details and repossession information into the company's Asset Management System (AMS) or Loan Management System (LMS) with an "In Inventory" status.
5.3.1 Within 24 - 48 hours of intake, the Operations Department arranges for a comprehensive valuation of the repossessed vehicle.
5.3.2 If an external valuer is used, they will provide an independent market valuation report.
5.3.3 A mechanical assessment will be conducted to identify any underlying issues or necessary repairs that might affect the vehicle's value or saleability. This can be done by an internal mechanic or an external service.
5.3.4 All valuation and mechanical assessment reports are added to the vehicle's file.
5.4.1 The Finance Department receives notification of the repossessed vehicle and the valuation report.
5.4.2 Record the repossessed vehicle as an asset in the company's financial books at its determined fair market value, adjusting for any outstanding loan balance and repossession costs.
5.4.3 Track all costs associated with the repossession, storage, valuation, and any necessary repairs.
5.4.4 Update the client's loan account in the LMS to reflect the repossession and the new status of the loan.
5.5.1 Based on the valuation and mechanical assessment, the Operations Department determines the appropriate disposition strategy (e.g., public auction, private sale, internal transfer).
5.5.2 Ensure all necessary legal documentation is in order for the sale or transfer of the vehicle.
5.5.3 If repairs are deemed necessary to enhance saleability, coordinate these repairs.
5.5.4 Prepare the vehicle for sale, which may include cleaning and minor detailing.
Vehicle Repossession Order/ Authorisation Letter (see LMS)
Vehicle Repossession and Intake Form (see LMS)
Photographic Evidence of Vehicle Condition
Personal Belongings Inventory Form/Authorisation Letter (see LMS)
External Valuation Report (see template)
Mechanical Assessment Report (see template)
Asset Management System (AMS) / Loan Management System (LMS) records
All staff involved in the repossession and inventory intake process will receive mandatory training on this SOP, related policies, and legal compliance annually or upon significant revisions.
This SOP will be reviewed annually by the Operations and Finance Departments to ensure its continued effectiveness, compliance with legal requirements, and alignment with business objectives.