How to Get Your Repossessed Car Back: What You Need to Know

What Happens After a Car Repossession?

After your car is repossessed, it is taken to a storage facility, and typically prepared to be sold at auction. If you're looking to get your car back, the first step is getting in touch with your lender. They may be able to tell you what options are available. There may be a few options at your disposal, depending on why your vehicle was repo'd.

One of the most common reasons for a repo is auto loan default, typically caused by missed payments. Another reason could be a lapse in your car insurance coverage. Whatever the reason, contact your lender and ask about the specifics to see what options you have.

How Much Will I Have To Pay After A Repossession?

There's no way to determine the exact amount that you will have to repay the lender. This is determined by whether or not your lender can sell your vehicle after a repo, and if there's a deficiency balance. If the sale of the car doesn't cover the amount of your loan, you will need to cover the remaining amount. You will also pay fees to your lender for the repossession, and to the storage facility that held your vehicle.

If your lender can't sell your vehicle at auction, you're still responsible for repaying what you owe, and in this case, it may be more than you hope.

3 Ways to Reclaim Your Vehicle After Repossession

After a repossession, there are usually three ways to get your vehicle back. All of them involve having some cash:

1. Redeeming your auto loan – Redeeming means you pay off your entire car’s loan balance, and the fees incurred during the repression process (recovery company and storage fees) so you gain full ownership of the vehicle. This typically isn’t an option for many borrowers, since this could mean forking over a lot of cash in one lump-sum payment. If you have the money to pay it off and you want the car back, it’s an option to consider.
2. Reinstating your auto loan – Before your vehicle was towed away, your lender should have sent you a letter letting you know that you’re on the path to a repo. In this letter, there’s usually information about what you can do to reinstate your loan (continue it). The requirements of reinstatement can vary, but to reinstate your loan you generally need to make up all missed or late payments and agree to continue paying. If you didn’t get this letter, or it was misplaced, then call your lender and ask about reinstating your loan if you want to keep your car.
3. Buying the vehicle at auction – When a car is repossessed, it’s usually prepared for auction. Most auto lenders sell repossessed vehicles to try to cover your remaining loan balance. You have the right to be notified when and where the auction for the car is taking place, and you have the right to attend the auction and bid on the vehicle. If you win, you’re still responsible for any of the remaining loan balance and probably the fees incurred during the repo process, including recovery and storage fees. If you don’t win the auction, your car is sold to someone else. The profit from the auction is applied to your loan balance, but if there’s a deficiency balance, you still owe that to the lender.

Reasons Why Cars Get Repossessed

Before you head out to get your vehicle back, consider the reasons why it was repossessed. Was the loan becoming unaffordable? Did you lose your job temporarily? Is your budget getting tighter? Or, did it need repairs that forced you to choose which bill to pay?

If you reinstate your loan, can you continue to make the payments? Can you afford auto insurance and maintenance? If you were struggling to stay on top of the car loan before, what happens in the next few months?

Even if you manage to get your vehicle back, you still have a repossession listed on your credit reports. The repo doesn’t disappear even if you reinstate the auto loan. If you get the car back and it gets repossessed again, that could be two repossessions listed on your credit reports from the same auto loan.

Instead, it may be a better idea to let the vehicle go and finance something less expensive to get by if you don’t think you can manage the loan once you get it back. You could also aim for a car loan that’s reported to the credit bureaus so you can improve your credit for the future.

Repos can make it very difficult to get approved for auto financing, and a repo that’s less than a year old can limit your car loan options for a while. If you believe you can stay current on the auto loan once you get the vehicle back, then it could work out in your favor. But if you were struggling beforehand, and nothing has changed, consider refinancing the car loan or letting the vehicle go.

Getting Another Vehicle After a Repo

Getting your car back the same day after it's repo’d isn't in the cards for everyone. If you can’t get it back, then it may be time to start looking into other vehicle options. Immediately after a repo, for at least one year, one of your only options in getting auto financing is going through a buy here pay here (BHPH) dealership. These dealers typically don’t review your credit reports, so a recent repo may not be a concern.

Most car lenders won’t consider you for financing if your repo is less than a year old, but BHPH dealerships could be your answer for the time being.