The "Repo Man" recently repossessed your car for failure to make payments.You still owed $5,000 on the loan,but since it was always broken,you were glad to get rid of it anyway.The bank sold the car at a wholesale auction for $3,000.The bank also paid the "Repo Man" $200 and paid attorney fees of $300.Based on the deficiency payments clause in your loan,what are you liable for?

Question

Quizplus · Accepted Answer

Based on the deficiency payments clause in the loan, you are liable for the difference between the amount owed on the loan ($5,000) and the proceeds from the sale of the car ($3,000), minus the expenses incurred by the bank for repossession and attorney fees ($200 + $300 = $500). 
Therefore, the deficiency payment you owe is $5,000 - $3,000 - $500 = $2,500, which is option D.

The "Repo Man" Recently Repossessed Your Car for Failure to Make