Question: Do You Still Have To Pay If Your Car Is Repossessed??

Even if your car is repossessed and later sold at auction, you might not be off the hook.

If your car sold at auction for less than what you owed on the loan, you must still pay the remaining balance to your lender.

The creditor will notify you of how much you owe and you will be responsible for making payments.

How bad is a repossession on your credit?

Pretty soon, those missed payments could lead to a car repossession. According to Experian, auto repossessions stay on your credit report for seven years after the original delinquency date. It can negatively impact your credit for the duration of the seven years but that impact lessens over time.

How long before a car is repossessed?

A bank can repossess your vehicle when you’ve stopped making the monthly payments agreed upon in your financing arrangement. Most banks will begin the repossession process after you’ve stopped making payments for 60-90 days.

What can I do if my car is repossessed?

If you want to get your car back after repossession, you have several options:

  • Redeem the car or reinstate the loan (if allowed in your state or by contract).
  • Wait until the sale and attempt to bid on the car at auction.
  • Negotiate with the with the creditor to try to get the car back.

How long until your car gets Repoed?

How Long Before They Repo a Car? Depending on the state you live in, its repossession laws, and your lender, the repossession process can begin as soon as you’re one day late on a car payment.

What do you do when your car gets Repoed?

Often, a bank or repossession company will let you get your car back if you pay back the loan in full, along with all the repossession costs, before it’s sold at auction. You can sometimes reinstate the loan and work out a new payment plan, too.

Is voluntary surrender better than repossession?

Whether you return the car yourself or a repossession company is sent to get it, you are not repaying the debt as agreed. In the end, that is what lenders look at and what hurts credit scores. The benefit to a voluntary surrender is that you are proactively working with your lender to resolve the debt.

What happens if my car is repossessed and I don’t pay?

If you continue to miss payments, and do not reach an agreement with your lender, the car will likely be repossessed. If your car sells for less than your loan balance, you will owe the lender the difference, called the “deficiency balance”.

How can I stop a repossession?

Avoid Repossession in 3 Quick Steps. To avoid repossession, know where your finances stand, explore your options, then call your lender. If you’ve missed a payment on your car loan, don’t panic — but do act fast. Two or three consecutive missed payments can lead to repossession, which damages your credit score.

Photo in the article by “Wikimedia Commons” https://commons.wikimedia.org/wiki/File:Hyundai_Eon_Front.jpg