Table of Contents:

Car repossession: What is it and how will it affect my credit?

What Should You Know About Car Repossession?

What Happens When Your Car Gets Repossessed

How To Get Your Car Back from Repo?

Can My Car Be Repossessed If I Have The Title?

How Long Does A Repo Stay On Your Credit Report?

How Many Car Payments Can You Miss Before Repo?

What Can You Do If Your Car Was Repossessed from a Title Loan?

Car repossession: What is it and how will it affect my credit?

Buying a car is quite an expensive decision, so many people borrow money in order to have the vehicle they want. However, a loan does not mean that you own the car, as the lender can still take it away if you don't make regular monthly payments. What's more, you also risk not only losing your car but ruining your credit. So, in order to avoid this situation, you need to have a complete understanding of what repossession is, how it works, and what you can do.

What Should You Know About Car Repossession?

In the conventional sense, a repossession means that a bank or leasing company can take your vehicle if you miss payments. What's more, they don't tell you when they're coming to repossess a car, so the lender can send a driver to pick up the car with a tow truck. That is why it is difficult to unambiguously answer the question, how many car payments can you miss before repo.

Often, borrowers are notified that they are late in their payments, so they usually have some time to resolve the situation until the lender picks up the car.

Ad

Loans for ANY NEEDS
APR from 4.99%

What Happens When Your Car Gets Repossessed

On average, borrowers need a large enough amount to purchase a car. However, even if they think that they can pay off the debt on time, life periodically makes its own adjustments. Thus, many borrowers from time to time face the fact that they cannot make payments on time.

It is important to understand that loan delinquency can lead to the loss of a car and other unpleasant consequences, such as credit deterioration. When applying for a Title loan, you signed a promissory note, according to which you undertake to make timely payments. Thus, if you violate the terms of the contract, the lender has the right to repossess your car and sell it in order to consolidate the debt.

Each state has its own car repossession laws, but more often than not, a lender or repo man will come to your home, work, parking lot, and so on to repossess your car. It is important to note that he is not required to notify you that he is going to pick up your vehicle, so you will most likely know that your vehicle has been repossessed when you see that it is missing. What's more, if your car is repossessed, it will show up on your credit report for a long period of time.

How To Get Your Car Back from Repo?

If you want to return your car, there are two options for how you can do this. The first is to fully repay the loan with interest. Perhaps you have friends or relatives who can help you get through this, and then you make a plan to get their money back. Another option is to create a new payment plan with your lender. It is important to note that not every lender will work with a borrower who has already missed payments, but you will still be able to explain the situation to him and convince him that you will be able to make timely payments. So, if you pay the missed payments and create a new payment plan, the lender will most likely return the car to you.

Can My Car Be Repossessed If I Have The Title?

The short answer is yes. The bank can repossess your car even if you have a title. If you used your vehicle as collateral for a loan and failed to meet your obligations (for example, pay your debt on time), the bank may take your vehicle (as long as it follows the proper methods of repossession).

How Long Does A Repo Stay On Your Credit Report?

Vehicle repossession has a negative impact on your credit as it means you missed payments for a certain period of time. That is why it is important to do everything possible to avoid this situation.

However, if your car has already been repossessed, then this will remain on your credit report for 7 years, which may affect your ability to get a loan in the future.

How Many Car Payments Can You Miss Before Repo?

There is no definitive answer to this question, but in most states, by law, the lender has the right to repossess your vehicle even after you missed just one payment. More often than not, lenders will give you more time to pay off the debt before repossessing your car.

If you missed a payment, it is recommended that you inform the lender as soon as possible and discuss ways to resolve the problem before they take your vehicle away.

What Can You Do If Your Car Was Repossessed from a Title Loan?

If a repo agent or lender has taken your car, this can put you in quite a difficult situation, since you probably need your vehicle to get to work, take your kids to school, and so on. However, if your car has already been repossessed, here's what you can do to make things better:

  1. Contact the lender. If you notice that your car has been repossessed, then the very first thing you should do is contact your lender. While most car repossession is due to missed payments, it can happen for other reasons too, such as if you don't have the proper insurance. In this case, you will only need to adjust your insurance policy. It is also possible that the lender made the mistake of taking your car if you continue to make regular payments. In this case, you will need to contact the lender and explain the situation to him.
  2. Examine your financial situation. Most likely, the first thing you think about after a car repossession is how to get your car back. However, first of all, you need to think about why you were not able to make timely payments. Was it because of an unforeseen life situation or because you can't afford such an expensive car? The answers to these questions will help you understand whether it is worth trying to return the car or whether you should still give up this decision for a while.
  3. Explore options for returning the car. If you still decide to return your car, then there are two options for how you can do this. The first is to fully repay the loan with interest. Perhaps you have friends or relatives who can help you get through this, and then you make a plan to get their money back. Another option is to create a new payment plan with your lender. It is important to note that not every lender will work with a borrower who has already missed payments, but you will still be able to explain the situation to him and convince him that you will be able to make timely payments. So, if you pay the missed payments and create a new payment plan, the lender will most likely return the car to you.