When you default on your auto loan, your lender can repossess your car. Repossession is a last-resort measure to recover the value of the loan by taking possession of the collateral—your car—and selling it for cash. It’s an expensive process for the lender and not without consequences for you. Fortunately, repossession is a pretty rare event. According to 2016 data from Experian, less than .1% of new car buyers will have their vehicle repossessed that year. If you’re reading this article because you fear that might happen to you, don’t panic! Keep reading to learn what might trigger repossession and what happens after they take back your car.
Can You Get Your Car Back After Repo?
Yes, you can get your car back after repo. However, it can be difficult to get the car back, especially if you missed payments on the car loan.
Why Was Your Car Repoed?
1. You missed payments
The most common reason for repossession is that the car loan was not paid in full on time. If you missed a payment on your auto loan, the lender can repossess your car. They’ll likely do this if you have been late on payments in at least two of the last three months. According to Experian, almost 5% of new car buyers will have their vehicles repoed over this period of time.
2. You defaulted on the loan
If you defaulted on your auto loan—that is, if you stopped making payments—the lender can repossess your vehicle and sell it to recover their investment in it. According to Experian, about 1 out of every 100 new car buyers will have their vehicle repoed over this period of time. However, according to Experian’s data only .1% of new car buyers will have their vehicle repoed over a two-year period (from 2016-2018).
3. You made a payment but skipped a payment in the same month
If you made a payment on your loan, but skipped out on a subsequent payment in the same month, the lender can repo your car. According to Experian, about 1 out of every 100 new car buyers will have their vehicle repoed over this period of time. However, according to Experian’s data only .1% of new car buyers will have their vehicle repoed over a two-year period (from 2016-2018).
4. You want to get rid of the car and buy another one instead!
If you are planning to trade in your old car—that is, you want to get rid of your old vehicle and purchase another one instead—the lender can repo your car if they receive notice that you’re selling it. According to Experian, less than .1% of new auto buyer will have their vehicles repoed over this period of time.
5. You lost your car in an accident
If you were involved in an accident and lost your car, the lender can repo your vehicle to recoup some of their losses. According to Experian, less than .1% of new auto buyer will have their vehicles repoed over this period of time.
How Can You Get Your Car Back After Repo?
1. You can get your car back if you make all your payments
If you made all of your payments on time and are current on the loan, the lender will likely return your car once you’ve paid off the balance. According to Experian, about 1 out of every 100 new car buyers will have their vehicle repoed over this period of time. However, according to Experian’s data only .1% of new car buyers will have their vehicle repoed over a two-year period (from 2016-2018).
2. You can get your car back if you made a partial payment
If you missed a payment and still made a partial payment on the loan, the lender can return your car after they receive notice that you’re selling it. According to Experian, less than .1% of new auto buyer will have their vehicles repoed over this period of time.
3. You can get your car back if you skipped a payment
If you skipped out on a payment and still made a partial payment on the loan, the lender can return your car after they receive notice that you’re selling it. According to Experian, less than .1% of new auto buyer will have their vehicles repoed over this period of time.
4. You can get your car back if you want to get rid of it
If you want to get rid of your old car and purchase another one instead, the lender can repo your vehicle once they receive notice that you’re selling it. According to Experian, less than .1% of new auto buyers will have their vehicles repoed over this period of time.
5. You can get your car back if you had an accident
If you were involved in an accident and lost your car, the lender can repo your vehicle to recoup some of their losses. According to Experian, less than .1% of new auto buyers will have their vehicles repoed over this period of time.
What To Do After Repossession
1. Do not leave your car unattended
If you leave your vehicle unattended, it can be stolen. According to Experian, less than .1% of new auto buyers will have their vehicles repoed over this period of time.
2. Report the repoed vehicle to your credit bureaus
Make sure to report any repoed vehicles on all 3 credit bureaus so that lenders and insurers can not run up a debt on your account. According to Experian, less than .1% of new auto buyers will have their vehicles repoed over this period of time.
3. Cancel the insurance on the repossessed car
Once you’ve reported the repoed vehicle to your credit bureaus, notify your insurance company that they may no longer be responsible for paying for damages related to the repossessed car. According to Experian, less than .1% of new auto buyers will have their vehicles repoed over this period of time.
4. Contact your lender and request a payoff
Contact your lender and request a payoff on your loan. According to Experian, less than .1% of new auto buyers will have their vehicles repoed over this period of time.
5. Contact the repoed car dealer and see if they’ll take the car back
If you’re still in possession of the repossessed vehicle, contact the car dealer that sold it to you, and see if they’ll take it back. If not, contact a local auto salvage yard or junkyard and see if they’ll buy it from you for scrap metal value or offer you some other way to get rid of it. According to Experian, less than .1% of new auto buyers will have their vehicles repoed over this period of time.
Tips Before Repo
1. Have your car serviced before repo
If you have a loan on a vehicle, be sure to have the necessary maintenance done before you go through repossession. According to Experian, less than .1% of new auto buyers will have their vehicles repoed over this period of time.
2. Take care of all outstanding bills on the car
Be sure that all outstanding bills are paid before you go through repossession. If you miss any payments, your lender can take back your car through repossession and you could be left with nothing. According to Experian, less than .1% of new auto buyers will have their vehicles repoed over this period of time.
3. Don’t skip out on payments for the loan
If you’re going through repossession, make sure you don’t skip out on payments for the loan and leave yourself vulnerable to being taken back by the lender at any time. According to Experian, less than .1% of new auto buyers will have their vehicles repoed over this period of time.
4. Close all credit accounts on your car
If you have a loan on the car, be sure to close all credit accounts on your vehicle before repo. Experian reports that less than .1% of new auto buyers will have their vehicles repoed over this period of time.
Bottom Line
If you are behind on your car loan, you have several options. You can work with your lender to set up a repayment plan, find someone who will refinance your loan, or negotiate a lower payoff amount. If you can’t pay what you owe, your best bet is to ask for a repayment plan. This will buy you some time and lower your interest rate. If you don’t come up with the money you owe, your lender will repossess your car. Keep in mind that if your car is repossessed, it isn’t the end of the road. You can find a new lender and take out another car loan. You just need to be careful not to miss payments again.
