Adam Fader, Senior Manager of Business Development for MVTRAC, emphasized the need for lenders to expedite inbound recovery processes to mitigate depreciation and hidden impound-related costs. He highlighted the company's Monitor, Verify, Recover solution during a statement on the AFSA Extra Credit Podcast.
"Every single day a vehicle is depreciating, so time is of the essence, right," said Fader. "Specifically, what we really want to nail down on today is really the inbound side of things, right? We've recently launched our NVR product, Monitor, Verify, Recover. A lot of the hidden costs…is the bailout fees, or the ancillary fees."
According to the American Financial Services Association (AFSA), auto lenders and credit unions are encountering increasing hidden costs associated with impounds and administrative delays. These include bailout and ancillary fees that accumulate while vehicles depreciate. Industry discussions have focused on tightening inbound processes and employing proactive alerts to safeguard liens and reduce loss exposure. A recent AFSA Extra Episode podcast featuring MVTRAC and Secure Collateral Management detailed how delays can lead to millions in avoidable expenses and how process automation can help reduce these costs.
Charge-off trends illustrate the importance of faster recoveries. The net charge-off rate for U.S. banks' auto loans was 0.83% in the second quarter of 2025, down from 1.09% in the previous quarter but still above long-term averages. This reflects ongoing credit normalization and pressure on lenders' loss reserves. Elevated delinquencies and aging repossessions can increase losses through storage, impound, and administrative fees—costs that compound when vehicles are not recovered promptly. Monitoring inbound notices and acting swiftly helps mitigate those losses before they become charge-offs.
Depreciation presents a constant challenge: consumer guides indicate that cars typically lose 15–35% of their value in the first year, 40–60% by year three, and 60–70% by year five. This decline means each week of delay significantly reduces collateral value and potential recovery proceeds. While depreciation rates vary by make, model, and condition, the trend is clear—time is money for lenders managing impaired assets. Integrating real-time alerts and verification can preserve value by accelerating recoveries by days or weeks.
Fader's role at MVTRAC involves connecting auto lenders with technology solutions and a nationwide recovery network to prevent charge-offs and reduce costs. With over a decade of experience in vehicle finance and repossession services, his expertise spans client relations and vendor oversight, providing him with practical insights into impounds, inbound processing, and recovery workflows.