If you find yourself at the wrong end of a car repossession, you may not know what to do. That’s why debt is never a good thing and you should avoid it like the plague. Everyone wants the latest and greatest gizmo, and they want it right now-and they’re perfectly willing to go into a heap of debt to get it. 2 It’s no wonder why there’s a spike in delinquent car loans-especially when you add in the price increases in both new and used cars because of supply chain issues, widespread company layoffs done in anticipation of a recession, the skyrocketing costs of everything else thanks to inflation (including gas).Ĭar loan defaults are a classic example of people making stupid decisions with their money and living beyond their means. When the government gravy train ended and lenders reinstated rent and other payments, people realized they couldn’t afford those monthly $700 new-car payments. In 2022, approximately 2 million cars were repossessed-that’s up from 1.7 million in 2019! 1 What’s behind the uptick in repossessions?ĭon’t let car payments hold you back! Learn the proven plan to win with money. But there’s something deeper going on here. Sure, the main culprit of car repos is people being late on their payments. It’s all spelled out in the loan agreement-you know, the one you probably didn’t read all the way through. In some states, you could get slapped with a repo just for not having the right car insurance. So when you don’t pay, the lender can take it back. Like we said earlier, when you finance a car, it’s technically not yours. It’s pretty simple: Cars are repossessed because people default on their car loans by not making payments. If you’re an active-duty member of the military, the lender has to get a court order before starting a repossession. Certain states require lenders to give delinquent borrowers some notice before their car is repossessed. The bank could still order a car repossession. But even if you’ve only missed one payment, you might not be out of trouble. Usually, a repo happens when you’re over 90 days late on the loan. How many car payments can you miss before the car’s repossessed? That’s completely up to the lender and the state. They can get a duplicate key for your car and drive it away. They can take your car from your garage if the garage is open. and they will take your car.Īnd like Liam Neeson, the repo men have a “very particular set of skills” for getting your car-though the limit of those skills depends on the state you live in. Some people try to hide their car, like parking it blocks away from their house, that kind of thing. And because of the information you filled out on the loan agreement, the bank knows where you live and work. That’s right-day or night, at home, work or school. Here’s another thing: The bank can come and get your car at any time once your loan becomes delinquent. To do that, the bank contracts with a local repossession company, which sends a guy out with a tow truck to make your car magically disappear-by transporting it to a repo lot. In other words, if you don’t pay your car payments on time (what the bank folks call “keeping your loan current”), the bank can take your car back. Let’s walk through what a car repossession is, how it works, and what your options are to deal with it-or maybe even avoid the repo in the first place.Ī car repossession happens when a loan on a car is delinquent. And right now, all you want is to set things straight and get your car back. Almost no one signs a car loan with the intention of skipping payments, but life happens. If you’re facing a car repossession, you’ve probably got a lot of questions.
You might be lost, confused, scared-maybe even angry. So if your car gets repossessed, lots of emotions come out.
For most people, having a car is essential.
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