Just one missed car payment puts you at risk of repossession, depending on the language of your loan contract. According to some state laws, you may be able to miss two or three payments before a repo occurs. Regardless of your state’s laws, the best way to prevent a repossession from happening is to take action before you miss any payments.

Preventing a Car Repossession from Happening

The best way to prevent a repossession from happening if you're worried about falling behind is to reach out to your lender. Your lender doesn’t want to go through the repo process either, and is more than likely going to want to try and assist you.

What your lender can do to help varies, but some common things they may suggest include:

  • Loan deferment – This is where you skip a month’s payment and have it tacked onto the end of the loan.
  • Paying the following month – Similar to a loan deferment, you skip a payment this month, and you’re required to make two payments the following month.
  • Refinancing – If your financial issues put you at a more long-term risk, your lender may suggest refinancing. In order to qualify, at least a year needs to have passed and your credit score needs to have improved since taking out the loan. When you refinance, you typically lower the monthly payment by qualifying for a lower interest rate or extending the loan term.

How Does Repossession Work?

If you took steps toward preventing repossession by contacting your lender but they couldn’t help you out, what happens next? Unless you can come up with the cash fast, you’re going to face a repo.

The process of repossessing your vehicle takes time and is stressful, and goes something like this:

  1. How Many Payments Do You Have to Miss before Your Car Is Repossessed?The repo man from a third-party recovery company comes and takes your car on the lender's behalf. They can take it wherever and whenever they want, without warning, as long as they don’t take it by force or breach the peace.
  2. Your vehicle is typically kept at an impound lot for 30 days. This gives you time to either reaffirm or redeem the car loan.
  3. If you don’t get your vehicle back during this period, it’s taken to an auction and sold. You’re allowed to attend and can bid on it to buy it back. However, you’re required to pay any deficiency balance plus storage and repo fees if the selling price of the car doesn’t cover what you owe.

Need an Auto Loan after a Repossession?

Always remember that you have the chance to prevent a repossession from ever happening if you reach out to your lender ahead of time. Even if they can’t help you, you’re going to be on better terms with them since you kept them informed.

If you lost a vehicle due to repossession and dinged your credit score because of it, you may still be able to finance another car. The key is to work with the right lender, and we can help you find one.

At Auto Credit Express, we know where to go to find the dealer you need. Save yourself the time and energy of looking for the right dealership, and fill out our hassle-free auto loan request form instead. We'll get to work matching you with a local dealer after you do.