The last four years have been difficult ones for many people. Banks have closed, home values have dropped and jobs are disappearing. Because of this, most people are spending less money, so the economy isn't flowing as freely as it did before. These factors can all pile up on one another to create situations in which many good people can get into financial trouble. If this has happened to you and you get behind on your used car payments, or your car insurance lapses, you might find yourself in a situation in which your car is repossessed.
The good news is you won't have to give the car up. There are steps you can take to regain control of the car'”or at the very least, least minimize the financial toll the repossession can take.
Of course, the best defense is a good offense. Keep a close eye on your finances. The moment you see your situation change and realize the payments are going to be difficult to make, get in touch with the lender to try to work out a new payment plan. Often, an auto loan company would rather renegotiate your deal rather than go through the hassle of repo-ing the car. If that doesn't work, try to get a new loan with lower payments from another loan company. Failing that, your best option is to sell the car for as much as you can and try to pay the loan off.
If it's too late for all of that, and the car has already been taken, contact your lender and find out what they need you to do to get the car back. Most times, they'll just want the back payments, although in some situations they might want you to pay the car off altogether so they can just be done with the two of you (you and the car). If you plan to come up with the money, be aware there will probably also be repo, storage and towing fees. Yes, they can charge you for sending someone out to take the car, they can charge you for having it towed and they can charge you for storing it while you work out arrangements to get the car back.
Within 60 days from the time the car was repossessed, the lender must inform you in writing of their intention to sell the car. They have to do this at least 15 days before the date of the sale to give you time to work something out to get it back. You can also submit a written request to delay the sale for an additional 10 days'”to give yourself more time to gather the resources. Be aware, you'll still owe them the difference if the sale brings less than your outstanding balance and yes, this will include the cost of them selling the car.
This is why the best move, if you can't get it refinanced, is to sell the car yourself before it gets repossessed.
By the way, even if you come up with the money, under certain circumstances the lender can refuse to return the car to you. If you lied on your credit app, hid the car to avoid a repo, threatened the repo agent when it was picked up, trashed the car, threatened to destroy it, or used it in the commission of a crime, the lender is legally allowed to refuse to return the car to you. Similarly, if you've had another repo within the previous 12 months, or it's the third time the car has been reclaimed since you bought it, you'll probably be refused as well.
If the lender sells the car, within 45 days they have to provide you with an itemized statement detailing what the car sold for, what fees were associated with the repo and sale, how much of a credit you are owed if the car brought more than the sum of all the charges (it happens'”sometimes), or more likely, what you still owe to close the account.
As hard as it can be, in most cases, your best option is to sell the car before it gets taken. You'll save yourself a lot of hassle, protect your credit score, and maintain control over the situation.
For more detailed information, contact your county's department of consumer affairs. Sometimes they can get your loan modified, or help arrange extensions.
Exact time periods may vary based on local regulations.