What happens when my car gets repossessed?

Unfortunately, when you fail to maintain your agreement with a lender, you put yourself at risk of losing your car. The best thing to do is to avoid missing payments and maintain good communication with your lender even if you might be late. Lenders have the right to repossess a vehicle for a few different reasons, including late payments. If your car has just been repossessed, scroll down the page.

How can I avoid getting my vehicle repossessed?

It’s best to maintain a good relationship and communication with your lender. If you know you will not be able to make your payment on time, you should call your lender immediately. Make sure to contact them before the payment is due to make arrangements. This shows your lender that even under difficult circumstances, they can rely on you to take care of your promise to pay for your vehicle, and this should help you avoid having your car repossessed. Make sure you keep your promise to pay when a lender allows you extra days to make your payment.

What if I can’t pay my car payment?

If you know you are not going to be able to continue making your car payment, make sure to contact your lender as soon as possible. There may be a chance they can help you by making a payment arrangement. Sometimes if you have a good history on your loan, you may be able to refinance for a longer period of time to reduce your monthly payment. Lenders prefer to help their good customers continue to pay on the loan and not repossess. They may also be willing to give you a payment deferment, which would give you an extra month to get your finances in order and back on track.

What if my car has been repossessed?

If you are reading this after your car has been repossessed, there are a few things that can happen. First of all, your car is being stored by the lender or their agent. You will have the chance to get your vehicle back, but the terms are up to the lender. Although you can get it back within 10 days if you pay off the balance due including fees. Fees are typically administration fees charged by the lender, repossession fees and possible storage fees. If you cant afford to pay off the entire balance, don’t loose hope! Your lender may be willing to let you continue making payments, but only after requiring a specific amount paid up front before you can get the vehicle back. This amount may be the amount past due as well as repo fees, or they may require you to also reduce your principle balance as well.

If you do not redeem your vehicle, it will be sold. The amount it sells for will first pay the fees you owe, the interest due on the account, and then reduce the balance of your loan. In most cases this will not cover the entire amount you owe. You will then be required to pay off what is left over. It is best to get this taken care of as soon as possible once you are notified by the lender. They may also send your account to a collections agency or court to garnish wages or your bank accounts. Because you have signed a legally binding agreement to pay for your loan, the lender has the right to collect the entire amount you owe to them.