Car repossession is the process in which your car is taken off you.
This is generally done by the lender when you fail to keep up loan repayments or default in some other way.
The exact steps taken will vary according to where you live, as repossession laws are different from one place to another.
It is important that you read your loan contract, as this will tell you the circumstances in which car repossession can take place.
It will also let you see if they have to advise you through a court or if this isn’t necessary.
The most common reason this happens is that you have defaulted on the loan. Again, the contract will tell you what constitutes a default.
Most typically, the lender will take this action if you have failed to make the monthly repayments on time.
The vehicle is the lender’s security and gives them the guarantee that they won’t lose money if you stop paying them back.
Therefore, they may move swiftly to carry out car repossession even if you have only missed one or two payments. They want to make sure that they don’t lose money.
Another reason is that you may have failed to comply with some other requirement of the loan.
A good example here is if you haven’t taken out auto insurance on the vehicle. In this case, the lender will be worried about losing money if you have a serious accident without any cover.
As we have seen, the key is in understanding when repossession could take place. Take the time to read your contract and see in what circumstances this could happen.
You will then want to ensure that you stick all of the terms and conditions that are stated.
Paying on time is the most critical point. You need to check how many missed payments could trigger repossession.
However, be careful to read through other points such as the need for insurance. This will allow you to avoid the lender having to take this action.
If you fall behind on payments or default in some other way, don’t just wait and hope. You need to take action to avoid car repossession taking place.
This means getting in touch with the lender and explaining the situation. They should try to help you find a way to avoid the car being repossessed.
You are sure to be shocked and upset if your vehicle gets repossessed. However, don’t get angry at the people taking away the car or at your lender.
The first step is to find out the exact situation.
How much do you owe them, and are they planning to sell the vehicle at an auction? It is possible that you will still owe money on the loan even after the auto has been sold?
This is now a problem to be resolved, which can be done in the following ways:
By taking the right steps, you can stop car repossession from becoming a bigger headache.
However, it is far better to do everything possible to avoid it happening in the first place.
