If you finance or lease a car, you don’t own it — at least not technically. If you stop making payments, the vehicle can be repossessed. What happens when a car gets repoed? The bank or leasing company takes the vehicle back from a borrower. This is done when on-time, in-full payments aren’t being made. Usually, involuntary repossession is done without warning, and a driver or tow truck will be sent to pick up the vehicle.
Repossession is outlined as one of the lender or leasing company’s rights in their terms and conditions, which you have to agree to in order to finance or lease a vehicle. Still, Toms River drivers have some rights of their own, including:
When you think “car repossession,” you might think of situations you’ve seen on reality TV where borrowers would sooner destroy a car than give it back. The truth is, a lot of repossessions are done voluntarily. This is when you call your lender or leasing company and tell them to repossess the car because you can no longer make payments. Although your credit will still be affected, voluntary repossession is a better alternative than doing nothing and waiting for the tow truck to show up.
When the bank sells your car for more than what’s owed on your auto loan, you’re entitled to the difference. If the tables are turned, however, and the car sells for less than what’s owed, the lender may go to court and get a deficiency judgment against you. At this point, you’ll be held responsible for paying the difference, i.e. the loan amount that wasn’t covered by the sale of the car.
Car repossession stays on your credit for seven years after the original delinquency date. A repossession will continue to affect your credit score throughout those seven years, but the impact wanes over time. If you apply for an auto loan less than a year after a car repossession, however, you can expect the lender to deny it outright.
If you’re asking yourself, “My car was repossessed. What happens next,” contact us at Automotive Avenues! We may be able to help you take out an installment loan to cover the cost of your outstanding loan balance and get your car back. We serve customers in Trenton and Howell Township!
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