Once in default, most states allow the lender to repossess your car without notice. And while that means a lender can technically repossess the car after a single missed payment, it’s more probable that the repossession will happen after you’ve missed multiple payments.
A missed payment is defined as a payment that is more than 30 days late. Most banks give a 10-day grace period on car payments before they even consider them late. Between 10 and 30 days late, your only consequence will likely be a late fee.
Myth #1 – Car finance companies have to wait until you are at least 3 months behind on your payments before they can repossess your car. Truth – Car finance companies have the legal right to repossess your vehicle even if you are just one day late paying your bill.
Notice Generally Isn’t Required Before Repossession So, you might not even know when or where the car will be repossessed. But in at least one situation, you ‘ll get notice ahead of time. In a few others, the lender might be limited in when it can repossess your car. The loan agreement.
A repo man can ‘t send you to prison. This is a civil matter, not a criminal one. You won’t go to prison for not missing your car payments or for trying peacefully to stop the repossession. In some states, the repo agent can bring an officer or sheriff along for the repossession.
If the repo man can’t find the car, he can’t repossess it. Eventually the creditor will file papers in court to force you to turn over the car, and violating a court order to turn the vehicle over will result in accusations of theft.
A one -day- late payment does not affect a credit score. A late payment won’t be reported to the credit bureaus until it is 30 days past-due – meaning a second due date has passed.
Refinance Your Car Loan. Trade In or Sell Your Vehicle. Voluntarily Surrender It. Instant Action to Take Now if You Can’t Afford Your Car Payment.
When you are reaching 90 days past due, they will up their pressure and usually once you are 90 days past due they will begin repossession process. Usually four months behind in payments then they come looking. The thing is they will find you sooner or later.
How to Avoid Repossession Communicate With Your Lender. As soon as you think you might miss a car payment, reach out to your lender to discuss your options. Refinance Your Loan. Reinstate the Loan. Sell the Car Yourself. Surrender the Vehicle Voluntarily.
Often, a bank or repossession company will let you get your car back if you pay back the loan in full, along with all the repossession costs, before it’s sold at auction. You can sometimes reinstate the loan and work out a new payment plan, too.
More and more car dealerships are stashing GPS tracking devices on financed cars to track the vehicle. With a GPS tracker on the car, the bank can locate the vehicle and disable it if the buyer is negligent with payment. However, many see it as a way for banks to take advantage of buyers.
Repossessions can occur at any time of day or night — while at the supermarket, taking the kids to school, at a relative’s home for holiday dinner, or while asleep. Even if a borrower anticipates a repossession may occur, it never happens at a good time.
In some cases you can get the repossession fees waived. You might want to consider talking to a bankruptcy or consumer rights lawyer about your options – especially if the fees on top of the amount you already paid the lender will put you in a bind.
If you can ‘t afford your car payments, you can give the car back to your car loan lender. But think carefully before you do this—you might still owe the lender money. Carefully weigh your options, and the pros and cons of each, before you take action.