How Does the Car Repossession Process Work?

If you're struggling to keep up with your auto loan or lease payments, the idea of vehicle repossession can seem terrifying. However, you can rest assured knowing it won't happen out of the blue. There are car repossession laws that lenders and dealerships must abide by, and there are even ways to resolve payments issues before a repossession becomes necessary.

Our team at Fred Beans Auto Loans wrote this article to explain how the car repossession process works. Once you read it, if you have any further questions, don't hesitate to contact us.

Why?

Why would an automotive lender or a car dealership have to repossess your car? The answer is simple: if you default on your loan or lease. Your individual contract will outline what specifically qualifies as a default. In most cases, failure to make a payment on time will suffice.

How?

How would they go about repossessing your car? If you default on your loan or lease, car repossession laws give lenders, dealerships, and qualified third parties significant leeway to effectively repossess your car. They can seize your vehicle at any time, without giving you a warning-they can even come on your property and it's not considered trespassing.

In many states, automotive repossession agents are bound by a "breach of the peace" clause. This helpful law prevents them from using physical force, violence, threats, and from breaking into a closed garage. If anybody repossesses your car using these techniques, contact a lawyer immediately.

Deficiency Payment

One of the most frustrating parts of the car repossession process is paying the deficiency judgement. When your creditor repossesses your vehicle, they'll then sell it in either a private sale or a public auction. The deficiency is the difference between what you owe on your contract and what they get for reselling the vehicle.

As long as the resale is conducted in a "commercially reasonable manner" (which is legal jargon to ensure they don't intentionally rip you off), you need to pay this difference, along with any other fees associated with the repossession.

Personal Property

The good news is that you're legally entitled to your personal property that's inside the vehicle. Certain state laws prevent your creditor from keeping or selling any items they find in the car. If you believe they've done this, contact an attorney as soon as possible.

Talk with Your Creditor Today to Prevent Car Repossession

The better news is that minor hiccups in your payment schedule don't need to turn into an all-out repossession. If you're falling behind on your auto payments, or if you're worried about doing so, talk to the institution that's providing your loan or lease to work something out.

Reach out to us at Fred Beans Auto Loans so we can come up with a plan to get you back on track with your payments. Contact us today to learn how we can help!