If you have credit problems and you're having trouble making your car payments, the very worst thing you can do is wait until after repossession to do something about it.

After Repossession

Here at Auto Credit Express, since we've spent the past twenty years helping car buyers with credit problems, we typically receive two hundred or more questions each month. Most are from potential borrowers with bad credit who want to know about the subprime car loan process. Some even involve consumers who have dug themselves in an even deeper hole than the one they started out with. Here is one of those questions:

"My car got repossessed. I have a lot of equity in the car. Can you help me with a refinance loan?"

There are a couple parts to this question, so let's begin.

Auto Credit Express is Not a Lender

Like quite a few of the questions we receive, this person seems to believe that Auto Credit Express is a lender. We aren't. What we do is match people with credit challenges to local dealers that are signed up with a wide range of lenders. But, even then, most of the lenders these dealers work with don't offer refinancing options.

Unfortunately, that is the least of this person's problems.

Waiting Until After Repossession is Not a Good Idea

For starters, if you're having problems making your car payments, you shouldn't wait until after it's been repossessed to take action.

after repossessionThe first thing you should do, if it looks like you won't be able to make your payment, is contact the lender. If you've made all your payments on time up until this point (and it would seem this person has since there's equity in the car), many lenders will give you a break by:

  • Allowing you to skip a payment or two and extend the loan by the number of skipped payments.
  • Refinancing your current loan with a lower monthly payment - but with a longer term than your current loan.

If your lender is unable or unwilling to do this, your second choice is to look for another lending source willing to refinance your current loan. Again, this is usually only possible if you have equity in your car and you've made all your payments on time.

Finally, your third choice, if you think you might have trouble making your monthly payments, would be to either trade your car in on something more affordable or sell it outright.

Keep in mind, though, that you must do all three of these things BEFORE your car is repossessed. But what if that has already happened?

Once Your Car is Repossessed

Once your car is repossessed, your options are limited. Depending on the lender and which state you live in, your lender might:

  • Offer to reinstate your current loan if you make all back payments plus all costs involved with the repossession.
  • Sell you your car if you pay the balance due on the loan plus any repossession costs.

Most states also typically require a lender to inform you when your car will go to auction, where you'll have the chance to buy it for cash. In any case, you'll still be required to pay the lender the difference between what your car sells for at auction and the balance owed on your loan contract - plus any repossession and auction fees.

The Bottom Line

The bottom line is this: if you're having money problems and you can't make your car payments, the very worst thing you can do is wait until after repossession to do something about it.

If, on the other hand, your problem is that you have bad credit and you're worried about getting financed, Auto Credit Express is here to help. We have a nationwide network of car dealerships that have the lenders and know-how to help people in all types of credit situations.

Our service is free, fast, and there's no obligation to buy anything. See what we can do for you by filling out our car loan request form today.