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What to Know About Vehicle Repossessions

Posted by on Friday, January 5th, 2024 in Blogs
Vehicle Repossessions | Get Good Credit

Making a monthly payment is hard enough as it is in addition to it being a hit to the bank account every month. Sometimes you find yourself in a dire situation where you may be unable to make that payment. When you start to accrue late payments, the auto loan lender may have other ways to get their money back: repossession.

No one wants to have his or her car repossessed, especially when it is required to get to work or to pick up the kids from school. Unfortunately, the lender has a right to take back their property if the borrower is unable to make payments on his or her auto loan. It’s hard enough to keep track of multiple lines of credit and balance your finances to fit those monetary obligations, losing one’s car would only make it harder.

Vehicle Repossessions - Get Good Credit

The lender can take your vehicle if you have missed multiple payments in a row or when you default on your loan. The default requirements are listed in the vehicle loan’s contract, which you should take the time to read and understand. Once the loan defaults, the lender has the right to take your vehicle at any given time without your consent or knowledge.

Of course, there are laws and rules the repo man must follow when taking a vehicle of any kind which falls under the “breach of peace” rule. This means the lender or repo-man cannot threaten you, use force, or go into a closed garage without your permission. However, if you leave your car in the driveway overnight, you may wake up one morning to find your vehicle missing, leaving you unable to get to work. Any personal property or items in the vehicle will be given back to you as the lender is not legally able to keep personal effects.


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Some lenders will even have you install a kill switch in your vehicle in case you are unable to make payments. The kill switch or starter interrupter disables your vehicle for use, making it easier to repossess; however, these types of devices are also dependent on state laws. Each state has different rules when it comes to certain devices, and how the lender can repossess your vehicle.

Once the lender has repossessed your vehicle, they have the option of selling it to recoup any losses from lending it out to you. The lender must inform you of the sale and how they are going to sell the vehicle. They will most likely sell it one of two ways: through a public auction or a private sale. If the lender decides to sell the vehicle through a public auction, you have the chance to bid on your vehicle to get it back, allowing you to pay off your car. Of course, if you have the money, you can always just buy back your automobile; however, if that was the case, you probably wouldn’t be missing payments in the first place.

If the lender is unable to fully recoup their loan amount by selling the car, they may require you to pay the difference. This would leave you without a car and still paying for it. For example, if you owed $5,000 on the vehicle and the lender sells it for only $2,000, you will still be liable for the remaining $3,000 plus any repossession fees, storage fees, and lease termination fees.

If you’re unable to make the monthly payments for your auto loan, it’s best to act as quickly as possible. You’ll need to contact your auto loan company to negotiate a way to push payments back or maybe extend the term of your loan; for example, they can extend a 60-month term to a 72-month term, which would lower the monthly payment. However, even though extending the term may lower the monthly payment, you will end up paying more for the car once the whole loan is paid off due to interest.

Vehicle Repossessions | Get Good Credit

A repossession will also negatively impact your credit score and history, making it harder for you to get a good auto loan in the future. If you are having trouble with your credit, you can always contact us at Fix Your Credit Consulting. Call us at (877) 212-2450 for a FREE consultation, and we can help you get your finances in order and clean up a credit report with negative items.

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