What to Do if Your Car Is Repossessed?

You go outside to drive to work one morning and your car isn’t there. In most cases your first thought might be the car has been stolen. However, in this case you know you’re a bit behind on payments, so you’re pretty sure the car has been repossessed.

What you do next will determine whether you’ll ever get to drive that car again.

Contact Your Finance Company

While missed payments are the most frequent cause of repos, it could also be failure to carry the proper insurance or any other perceived violation of your loan contract. There is also the possibility that the repo company took the wrong car.

Hey, it happens.

Whatever you think the deal might be, stay cool when you make the call. Approaching the situation from a place of anger will only serve to alienate the one person who can help you get your ride back.

Find out what the issue is, determine whether or not you’re in a position to meet the demand and act accordingly.

Be Real with Yourself

If they do offer you a deal to get the car back, are you really set to do what needs to be done to hold up your end?

Will you be able to afford the payment plus the insurance as well as the fuel and all of the other expenses associated with owning that particular car? Maybe you need to opt for something more economical and let that one go.

After all, if it was payment-related, something made you fall behind. Has that situation changed, or is it ongoing? It makes little sense to talk your way back into a payment you can’t handle.

Negotiate a Deal You Know You Can Keep

You might be asked to pay the loan off in full to get the car back if things have really gone sideways. Meanwhile, the car would probably still be in your driveway if you could afford to do that.

This means you’ll have to find somebody willing to front you the cash to put the restructured deal into play. Your best bet is likely to ask friends and relatives. Keep in mind though, you’re asking someone who cares about you to put themselves on the line.

Only ask if you’re sure you can follow through.

You might be able to negotiate a payment plan with the creditor — which is a much better route to go. Taking advantage of debt relief services might actually help you free up enough cash to make the new payment if you’re behind on other bills and struggling to make ends meet.

Be Prepared for Another Bill

Ironically, you can still be held liable for a portion of the loan amount — even after the car has been repossessed and sold at auction. In most cases, that sale will only bring the wholesale price of the car.

Afterwards, they could come after you to make up the difference between the sale price and the outstanding balance of the loan If you owed more than they got selling it. Gap insurance will come in really handy here.

And yes, they can take you to court and have your wages garnished, your bank account drained and your tax return confiscated if you can’t come up with it.

Knowing what to do if your car is repossessed can save you a lot of anxiety — and money. On the other hand, getting in touch with the lender before things are too far gone can help you prevent a repo in the first place.