Repossessions are not always cut and dry like most people figure. There are various examples of what can happen with repossessions and different reasons for each. As I have stated in another post, sometimes A bank will spend more money to repossess than the actual value of the collateral. But why is that? Easy, the debtor was an idiot and pissed someone off at the bank. Usually when the value is real low and you stop paying for the collateral, the bank will list it as a repossession and just charge it off.
The same goes for when collateral has been totaled and stopped paying on. The bank does not want a totaled unit so they will list it as a repossession in the credit reporting, but ultimately charge it off and leave it where it is. The registered owner is the one that will be liable for all expenses in regards to storage or whatever other expenses might arise on the totaled out collateral.
A typical scenario that went on all the time with car repossessions: A car is behind on payments, the debtor unknowingly parks it in a tow away zone. The car gets towed by a regular tow company not a repo company and storage begins building. The debtor finds out it was towed and calls the tow company but it is too much to get out. The tow company will send the lien holder a letter advising they have the vehicle and the balance due needed. Problem is this letter rarely makes it to the right department at the bank and the tow company gets the car, sometimes tow companies use old addresses or other ways to steal ownership. This is a total scam that the tow companies should never get away with but it happens all the time. Rent a car places lose brand new cars due to this law and tons of repos suddenly become registered to a new owner somewhere along the way and upon investigation, sure enough the tow company sent the bank a letter of lien and got a new title.
The bank repossesses but left me the car
Why bother becoming a car dealer and pay for cars at auction when you can just start a tow company and get your inventory less a tow expense. In the recent years towing companies have expanded into the monstrous car dealerships that do financing also.
Bottom line is that when a bank decides to not repossess the car from you, you still use it but very doubtful the bank will send you the title unless you pay it off. Perhaps an individual can apply for title as well by doing the same thing as tow companies, not sure. Otherwise you may not be able to register the car anymore.