If your car was recently repossessed, you may be wondering where it is and if you can get it back. The answer to this can be complicated, and can depend on your situation, but typically, repossessed vehicles are held in the recovery company's storage facility until they're turned over to the lender to prepare for auction.
There’s a lot that goes into an auto repossession, but we’re here to walk you through it.
If your car has been repossessed, the recovery company that tows your vehicle will take it to their business and hold it in an impound yard. The exact location of your car depends on who your lender hires to recover the vehicle.
After repossession, you're allowed to get any belongings that were left in your car at the time of the repossession, but you can’t simply locate your vehicle and take it back! To find your vehicle, you must contact your lender and ask where your car is being stored so that you can recover your personal belongings.
No matter what state you live in, the repo company is obligated to return your personal items from the car after it is repossessed. However, they may charge you a storage or handling fee for doing so.
You should also know that you will have to pay the recovery company a storage fee for the time between repossession and auction. The lender typically bills you for this after everything is said and done.
Getting your personal belongings is one thing, but if you'd like to get your car, you have a few options for getting behind the wheel again.
However, it won’t be free. And, whether or not you can even get your vehicle back also depends on the circumstances surrounding the repossession.
There are a few things you can do to stop the repossession if it's about to happen or to get your car back after it's been towed.
If your car has already been towed away, you typically have a few options to choose from.
If your lender intends to repossess your car, you may or may not get notice, depending on where you live. You may get a notice of the intention to recover your vehicle, or a letter stating you have to pay your loan balance in full. This is known as an acceleration notice, and it's your lender's way of telling you that the entire loan balance is now due to avoid repossession. Be aware that this isn’t an option in every state. It's also rare that a borrower can pay back the entire loan balance in one lump sum. But if you’ve received this notice, it means you’re about to face a repossession, and it’s past the time to get in contact with your lender.
It's worth noting that time is not on your side during the repossession process. If you think that you might even be in danger of getting your car repossessed, you should try to get in touch with your lender. If you've missed payments, you should try asking your lender for a payment extension, a loan deferment, or other modification to your payment plan to try and right the ship. Being on the cusp of a repo still is not a great situation to find yourself in, but acting quickly and straightening things out with your lender will save you a lot of time and headaches.
Unfortunately, you will not always be able to avoid repossession. If you have already received an acceleration notice, a repossession is imminent. That being said, lenders in most states are allowed to begin the repossession process without giving you any notice whatsoever. A repossession agent can retrieve your vehicle from either your driveway or a public parking lot. They are not, however, allowed to break into your garage or take your car from anywhere that would involve damaging property.
Once your car is repossessed, your lender is obligated to notify you and give you the option to buy it back. They will also give you the details regarding its impending sale, which may be either a private sale or at auction.
Unfortunately, you may still be on the hook for a deficiency balance, which occurs when the sale of the vehicle does not cover the remaining loan balance combined with any repo or auction fees. If this is the case, the lender will give you a deficiency notice as well.
Failing to pay the deficiency balance can lead to further collections or lawsuits. Being on the wrong end of a collections lawsuit or enduring potential wage garnishments could end up being even more of a hassle than losing your car in the first place, so we would recommend paying off any potential deficiency balance as soon as you can.
In addition to losing your car, a repossession will have a very negative effect on your credit score. Unfortunately, a repossession stays on your credit reports for seven years. That'll make it much harder to get approved for future auto loans, and you'll be saddled with a higher interest rate if you manage to get an approval.
Repossession is a bad situation for all parties involved. As previously mentioned, you may be able to buy your car back at auction, redeem your loan with a lump sum payment, or reinstate the loan by paying back everything you owe. Another option to halt collections or possibly discharge the debt would be filing for bankruptcy, although this is far from an ideal course of action and can still end up being very damaging to your credit.
It may not always be an option, but the best way to avoid repossession is to talk to your lender before you miss a payment when things start to get tight. Your lender likely wants to avoid a repossession, too, since it’s a hassle and the amount they receive at auction usually doesn’t cover the loan balance.
If you’re about to miss a payment or have missed one, reach out to your lender and open a line of communication. Some lenders may be able to offer deferment programs if you’re facing a financially difficult situation.
A deferment simply pushes your payment or payments back a few months and tacks the skipped payments onto the end of your loan. You have to make up those car payments eventually, but a deferment is designed to help you avoid missed payments and repossession. And, it allows you to keep your vehicle in hard times. As previously mentioned, any of these options are very preferable compared to the headache of going through a repossession, so be sure to contact your lender as soon as things start to get tight.
Following a repossession, most auto lenders are wary to approve a borrower with one on their credit reports. However, if your repossession is over a year old, a subprime car loan could be your next step in getting another vehicle. You will be saddled with a high interest rate and likely an unfavorable loan term, but it is still possible to get approved for an auto loan with a relatively recent repossession on your credit report. It's not an ideal situation to be in, though, and once again, we recommend taking every step you can to avoid a repo in the first place, as it will cause headaches, leave you without a vehicle, and cause severe lasting damage to your credit.
Subprime lenders work through a dealership’s special finance department, and they look at many aspects of your financial situation, not just your credit reports. We want to match you to a dealer with subprime lending options! Here at Auto Credit Express, we have a nationwide network of dealerships that help bad credit, post-repo, and even bankruptcy borrowers find the lending resources they need. Get started now!
Auto Financing Writer
Sean has over 2 years of experience writing for CarsDirect and a deep knowledge of automotive brands and pricing data. A SoCal native, he is also an avid car enthusiast with a background in sports journalism. Sean is a graduate of California Lutheran University with a Bachelor of Science in Business. Read more
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