Having your car repossessed usually makes for a very bad experience. Most people rely on their vehicles to get them to work, school and countless other places. If your car has been repossessed, it's important to know what your rights are and what actions you should take.
Repossession will damage your credit in a significant way, but you can take measures to reduce the impact.
My Car Has Been Repossessed: What's Next?
Your car has most likely been repossessed because you have fallen behind on your car payments. However, in some states, not fulfilling the insurance requirements in your loan or lease contract can also get your car repossessed. So, if you're puzzled about the repossession, call your lender to verify why the vehicle was seized.
Next, you should figure out what you want to do about the repossession.
Try to Get Your Car Back
Sometimes, the bank will give your car back if you agree to pay the loan back in full, along with all repossession costs. And you will have to do this before the vehicle is sold at auction.
Sometimes, lenders may allow you to reinstate your loan. You might even be able to work out a new payment plan to better suit your budget. Just remember that, no matter what, the repossession will probably not be removed from your credit report for seven years.
Don't Try to Get the Car Back
If you decide against reclaiming the vehicle, it will most likely be sold at auction. But you won't be off the hook even then. If you still owe $8,000 on your auto loan, and the car only sells for $5,000 at auction, you will still owe the lender $3,000, plus repossession costs.
This amount is called a deficiency balance. And if you ignore it, the debt can be sent to collections or the lender could sue you for the balance. Keep in mind that the lender has a responsibility to conduct the sale of the car in a "commercially reasonable manner." So, if the repossessed vehicle is sold at auction for a price that is too far under the fair market value, you may be able to dispute this in court.
If you don't take measures to retain the car, then decide later that you want the vehicle back, you should be allowed to attend the auction where it will be sold. You can bid on the car and buy it, but you may still be responsible for paying the deficiency balance and repossession fees.
Your Repossession Rights
Your car may be repossessed, but there are still things that the lender and/or repossession company cannot do. And it is important for you to know your rights so that you can take action if they are violated.
- Items inside of a repossessed vehicle may not be taken. This means that if you have a phone, tablet, laptop or CD collection in the car when it is towed, these items cannot lawfully be sold. Some states require the repo agency to give you a list of the items found inside the vehicle and let you know how you can retrieve them. Or, if you live in a state with different laws, you may simply need to ask about your property.
- Nothing may be damaged while the vehicle is being seized. There are laws that protect your property from being harmed. So, a repo agent is not allowed to break into your locked garage to get to the vehicle. This would be considered a "breach of the peace." So, if you experience this kind of violence, you should contact a consumer lawyer.
If you have experienced repossession, you may be in the process of repairing and rebuilding your damaged credit. And if you need to buy a car, you may be worried that getting auto loan approval will be difficult. If this describes your situation, Auto Credit Express can help.
Getting You Back on the Road
For nearly two decades, Auto Credit Express has been assisting car buyers with credit issues. And we can help you by matching you with a local dealership that can work with unique credit situations. You can get a good, reliable car and the opportunity to improve your credit just by making all of your loan payments on time.
The service that we provide is absolutely free, and our process is quick and hassle-free. Go ahead and fill out our simple and secure online car loan request to get started today.