What Happens When a Car is Repossessed?

If you’re making monthly payments on an auto loan in Phoenix, the lender owns your car until you complete the payments agreed upon in the loan. If you stop making loan payments, your car can be repossessed, meaning the lender takes it back. If you find yourself asking, “My car was repossessed. What happens next?” Rocky's Auto Credit is here to help. Keep reading to learn what happens when a car gets repoed.

My Car Was Repossessed. What Happens Next? You Have Rights.

When you finance a car in Glendale, part of the agreement gives the lender the right to repossess the car in case of non-payment. They will take the car and sell it at auction in an effort to recoup the money they lost. If your car is repossessed, it’s important to know that you have rights, too:

• The lender must let you know when the car is being auctioned. You might be able to buy it outright for the remaining balance on the loan, plus repossessed and storage fees.
• You have the right to any property that was in the car when it was repossessed.
• Some lenders are willing to work with Tempe drivers if they agree to pay the past due loan balance and repossession fees.

What Happens When a Car is Repossessed: Deficiency Balance

When the lender sells the car, if it sells for more than you owed on the loan, you’re entitled to the difference. However, a deficiency balance occurs if the car sells for less at auction than what was owed on it. In that case, sometimes a lender can sue for the difference.

Voluntary Repossession vs. Involuntary Repossession

Involuntary repossession makes for good television, but that scene isn’t reality. Voluntary repossession is far more common. If a Gilbert driver can no longer make car payments, they can call the lender, tell them the situation, and surrender the car in voluntary repossession. 

What Happens When a Car is Repossessed: Credit Rating 

A repossession will stay on your credit rating for seven years from the delinquency date. The impact will wane over time, especially if you work to build good credit with timely payments on other bills.

Rocky's Auto Credit Offers Repo Loans

If you have a car repossession on your credit history but need a car loan, see Rocky's Auto Credit. We offer repo loans and other financing options to help you get back behind the wheel of a vehicle you can afford. Consult our used Chevrolet and used Toyota inventories to find a reasonably priced, reliable vehicle today, then contact us to learn more.