If your car gets repossessed, you may be able to get it back by reinstating the loan, redeeming the vehicle, or buying it back at auction. How you can get it back depends on the state you live in – some allow you to reinstate your loan, while others don’t. If it's allowed in your state, keep reading to find out how to reinstate an auto loan after repossession.
How Reinstating a Car Loan Works
In order to reinstate a loan, you need to make up any missed car payments plus any repossession fees in one lump sum. A reinstatement must be noted in your loan agreement, regardless of your state laws. If it’s not listed, your lender isn’t going to allow you to reinstate, even if you have the money to do so.
If your contract states you can reinstate, you need to request a reinstatement quote from your lender. After this, your lender must send you a written notice of your right to reinstate.
On the notice is the amount needed to make the loan current, as well as how many days you have to reinstate (usually 15). If you don’t pay your lender within the given time frame, you can’t get your vehicle back and it most likely is going to go to auction and be sold.
When You Can’t Reinstate an Auto Loan
If reinstating sounds ideal, but your state or lender doesn’t allow it, what are your next options? You have two other ways you can get your car back after a repo:
- Redemption – Redemption the most common way to get your vehicle back after it’s been repossessed. Five days after the car is repo'd, you should receive a notice of your right to redeem from your lender. Listed in it is the total amount due and how long you have to redeem it. The difference between redeeming and reinstating an auto loan is that you must pay off the entire loan balance plus fees with a redemption – which most borrowers are unable to do.
- Buy it back at auction – Most lenders take your vehicle to auction in order to recover some of the loan balance. You can attend the auction and bid on it, but if the sale doesn’t cover the difference, you’re responsible for coming up with the balance owed to the lender.
The Bottom Line
You should do everything in your power to avoid repossession. Talk to your lender ahead of time and let them know you may have problems with making your payment. Lenders typically want to help, and don’t want to go through the repo process any more than you do.
Unfortunately, car repossession is something that can't always be avoided. If you've been through a repo but you need a vehicle, Auto Credit Express wants to help you find financing.
We work with a national network of dealerships that are signed up with subprime lenders. These places specialize in getting people in unique credit situations, like repossession, financed. Start the process of getting matched to a local dealer by submitting our online auto loan request form today.