How Long Before My Car is Repossessed?

How Many Missed Payments Before Repo?

A lender can legally repossess your vehicle just one day after missing your first payment, depending on the state you live in and its repossession laws. This depends on your lender's policy, though, and the language in your auto loan contract.

Just how long before the lender repossesses a car can also depend on your relationship with them. If you’ve been consistent with on-time payments, and this is your first missed one, you could discuss a repayment plan with the lender to avoid repossession.

On the flip side, if you’ve been delinquent in the past, the lender could speed up the repo process and take your vehicle sooner. Ideally, you should contact the lender before missing a payment.

How Long Does The Repossession Process Take?

In Iowa, you’ll have at least 20 days until the repo man shows up as soon as the lender has given you a notice of your options to correct the situation. In Maine, you’re given 14 days. In Wisconsin, repossession requires legal action, so you have as long as it takes to complete that process in the courts. 

The timetable you have varies by state and applicable law. But in most states, any time you miss a payment date and default on your loan, the lender is allowed to take possession of your vehicle without notice, as long as there’s no “breach of peace.” Breach of the peace is a very general term, however, so repo men have a lot of freedom when it comes to taking your car.

Known for a lack of credit checks and catering to lower-credit consumers, buy here pay here (BHPH) dealers are more likely to have a recovery company on standby to speed up the repossession process when a customer stops paying. There may be more leeway in time when you're financing through a franchised dealership or a larger chain.

How Can My Lender Help Me Avoid a Repo?

The first thing you should do if you fear repossession is talk to your lender. They determine whether to pursue a repossession order and may be willing to help you to avoid a repo. It costs money to repossess a car, and most lenders would prefer to work with you rather than come and get your vehicle.

Lenders have a few things they can do before things get too far off with your car loan. These options often include deferring your loan payment for a time or allowing you a payment extension. In some rare cases, lenders may be able to move your payment due date if your situation has changed. These can help you reorganize, get your feet back on the ground, and avoid vehicle repossession.

Contacting your lender before it gets to the repossession stage could present you with some options you haven't considered. Communication is the key to success when dealing with a sticky auto loan situation, so contact your lender as soon as you think you’re on the brink of missing a payment.

Try Trading In For a More Affordable Vehicle

You can avoid the further credit score drop that comes with repossession by using your existing vehicle as a trade-in. If there's enough equity in your car, you could pay off your existing auto loan, and then use the leftover money to put a down payment on a more affordable vehicle. Getting a reliable, affordable car with poor credit is possible, as long as you're working with the right lender for your situation.

Refinancing Might Be the Answer

Opting to refinance your auto loan can help you qualify for a lower interest rate. It's also possible to lower your payment through refinancing to a longer loan term, which saves you money month to month, but not overall as a lower interest rate would.

In order to be eligible for refinancing, you, your car, and your loan amount have to meet certain qualifications. The biggest thing that determines your ability to refinance your auto loan is your credit score – it either has to be good or has to have increased since the start of the original car loan.

How to Prepare for Car Repossession?

Clear your car of personal possessions (the company is supposed to return all personal property, but better safe than sorry) and prepare to take the next steps. According to legal website Nolo.com, there are typically four options for getting your vehicle back after a repo:

• Redeem your vehicle. If you’re already having trouble, paying off the entire loan balance plus repossession costs is typically out of the question, but is usually offered as an option called redemption.
• Reinstate your loan. The reinstatement option depends on the state you live in, and isn’t always available. This option allows you to pay back what you owe, plus repossession costs, and continue with your loan as normal. The catch is that you won’t be able to miss a payment again.
• Buy your car at auction. When a repossessed car is being sold at auction, as often happens, you have the right to bid and try to purchase your vehicle. However, if you're successful, you’ll still be responsible for paying the difference between the price you paid at auction and the total amount you owe the lender.
• File for bankruptcy. Filing for bankruptcy before the sale of your vehicle after repossession stops the lender from taking further action without court approval. This can often buy you the time needed to be able to get your car back. However, bankruptcy is a serious matter, and shouldn’t be done lightly. Make sure this option is the right thing for you before you consider going this route.

What Happens After Your Car Is Repossessed?

A repossession can negatively impact your credit score for seven years, which can impact your ability to get future financing. Most lenders want borrowers to wait at least 12 months before exploring a new auto loan.  

If you lost a car due to repossession, but you need a vehicle, Auto Credit Express can help. We work with a coast-to-coast network of special finance dealers who are experts at helping people in unique credit situations get financed. Fill out our free auto loan request form to find a dealer in your area and get started today.