Rules and repossession in case of bad auto credit
Like most things in life, car loans come with rules, and if you break them there are consequences to deal with. Rule # 1 for financing a car is simple: make your payments on time or face repossession.
What is a car repossession?
When your vehicle is towed, it is most likely the result of a repo. Repossession occurs when you default on your auto loan, usually due to one or more missed payments. If you haven’t developed a deferment plan with your lender, they’ll contact a salvage company to pick up your car.
Depending on your car loan agreement, your the vehicle could be taken back after a single missed or late payment. The amount of time you allow after a missed due date varies depending on the lender. Sometimes lenders are not required to let you know if they are coming to collect your car. This can make it even more difficult if you don’t expect someone to come and pick up your vehicle as you go through your day.
The repo process
Repossession doesn’t just happen; there is a process you follow, but it may vary from state to state. In many cases, your lender is required to contact you in writing with the intention of sending someone to collect your car. In some states, your lender is even required to give you a chance to stop the repo by catching up on payments; this is called the right to cure – but it is not compulsory, nor even available everywhere.
Whether you are ready to have your vehicle repurchased or not, there is some rules to follow by you and by the recovery company. For example, a repo specialist can’t just walk into your locked garage and take your car, but neither can you hide your vehicle from them on purpose. Your lender also has to follow the rules when it comes to working with you and selling your car – they can’t resell it for $ 50 if it’s worth $ 5,000, for example.
If a salvage company is forcibly threatening you, or threatening you in general, it’s called breaching the peace, and it’s not allowed. Leaving your vehicle from a closed or locked garage is also not allowed. However, like a car that you finance has the lender listed on the lien, the vehicle is collateral and can be taken in any public or private lot, street, yard or driveway by the chosen pension specialist.
Once the salvage company has possession of your car, it usually goes into a storage yard until the lender takes possession of it. Any personal items left in the vehicle must be returned to you by the recovery specialist. As for the lender, they are more likely to sell the car at auction. You must be notified by mail of the time, date and location of the auction, and are authorized to bid on the vehicle in order to collect it.
It doesn’t matter who wins the auction, if the car sells for less than what you owe the lender, you are still responsible for paying the lender your loan balance, plus trade-in and storage fees.
If all of that repossession stuff seems like more than you want to handle, then you’re not alone. Most people are not happy to find that they cannot pay for the vehicle they need. But a repo doesn’t have to be the way things are.
If you know, or at least suspect, that something needs to be done within your budget, one of the first things you should do is contact your lender. Lenders would rather avoid repossession just as much as you do. So if your lender can work with you, they probably will. However, they can’t help if they don’t know there is a problem.
In some cases, a lender may be able to offer you a reprieve, where your payment due date is pushed back by a month or more. Payments don’t go away, they’re usually just moved at the end of your loan. Your lender may even have other options, but you need to call them to find out.
Additionally, if you know your budget is changing, but haven’t fallen behind yet, you may be able to consider refinancing as an option to make your monthly car loan payment more affordable without losing the car you are paying for. love.
Obtain a more affordable vehicle
If you couldn’t stop the salvage service from transporting your vehicle, or if you want a more affordable option before calling the repo man, you will likely need a subprime lender. These lenders specialize in helping people with credit problems.
You can find subprime lenders at special finance dealers, and Express auto loan has assembled a national network of them. Let us direct you to a local dealer so you can skip the hassle of trying to stay two steps ahead of the repo man! Simply fill out our quick, free and no-obligation form auto loan application form, and we’ll work for you!