If you're struggling to make your auto loan payment each month, you may only be staying one step ahead of the repo man. This isn't the position you want to be in, especially if you're already dealing with a low credit score. So, just how long is it between the day you default and the time a recovery company rolls out in search of your car?

The Repossession Timeline

How Long Before My Car Gets Repo'd?The repo timeline depends on your situation. There's no time frame set in stone for how long there is between loan default and repossession. Many people think that you don't default on your loan until you've missed three months of payments. This is a myth, though. In reality, a lender can legally repossess your vehicle just one day after missing your first payment. This all depends on your lender's policy, though, and the language in your auto loan contract.

Known for a lack of credit checks and catering to lower credit consumers, buy here pay here (BHPH) dealers are more likely to have a recovery company on standby to speed up the repossession process when a customer stops paying. There may be more leeway in time when you're financing through a franchised dealership or a larger chain.

Keep open communication with your lender. Before you even need to start worrying about a repossession, you can avoid the situation by keeping in contact with your lender if you know you're going to miss a payment. It's up to them to determine whether or not to pursue a repossession order. Contacting your lender before it gets to this point could present you with some options you haven't considered. Communication is the key to success when you're dealing with a sticky auto loan situation, so contact your lender as soon as you think you’re on the brink of missing a payment.

The lender doesn't want to repossess your car. Believe it or not, most lenders don't want to see you fail to make your payments, and they don't want to repossess your car, either. This is because the repo process costs them money, too. Dealers and lenders that have to resell a repo aren't typically able to get as much money out of the deal, which also makes it unappealing for them. This is why many lenders would rather work with you than jump to repo your vehicle. But they can't do this unless you let them know what's going on.

How can my lender help me avoid a repo? Lenders have a few things they can do before things get too far off with your car loan. These options often include deferring your loan payment for a time or allowing you a payment extension. In some rare cases, lenders may be able to move your payment due date if your situation has changed. These can help you reorganize and get your feet back on the ground, and avoid vehicle repossession. However, long-term solutions could be your safest bet if your financial situation is getting off track.

Refinancing Might Be the Answer

If your lender can't help you avoid repossession. If you're not behind on payments yet, but you're unable to get the solution you need from your lender, it may be time to look into alternate options. In some cases, this means opting to refinance your auto loan.

Refinancing means replacing your current car loan with a new loan contract on your existing vehicle. This is usually done to save money on your monthly payment. The most effective way to do this is to qualify for a lower interest rate. It's also possible to lower your payment through refinancing to a longer loan term, which saves you money month to month, but not overall as a lower interest rate would.

In order to be eligible for refinancing, you, your car, and your loan amount all have to meet certain qualifications. The biggest thing that determines your ability to refinance your auto loan is your credit score – it either has to be good or has to have increased since the start of the original car loan.

Try Trading In For a More Affordable Vehicle

Options if you don't qualify to refinance. You don't have to live with an unaffordable vehicle payment, even if you can't qualify for refinancing. The next option to explore is trading in your too expensive car for something more affordable.

You can avoid the further credit score drop that comes with repossession by using your existing vehicle as a trade-in. If there's enough equity in your car, you could pay off your existing auto loan, then use the leftover money to put a down payment on a more affordable vehicle. Getting a reliable, affordable car with poor credit is possible, as long as you're working with the right lender for your situation.