What Happens When a Car is Repossessed?

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For those planning to lease or finance a car in Charlotte, you don’t actually own it. If you stop making your payments, your new or used vehicle can be repossessed. As a result, some asked, “What happens when a car gets repoed?”

 

 

To begin with, the bank, or leasing company, will take your vehicle back from the borrower. This will occur when on-time in-full payments aren’t being made. Repossession will be done with no warning to the owner and a driver and tow truck will be sent to collect the car.

For those saying, “My car was repossessed, What happens next?,” South Charlotte Chevrolet explores this topic in full detail below.

What Are My Rights If My Car is Repossessed?

“My car was repossessed, what happens next?” To start with, repossession is outlined by the lender, or leasing company’s, rights and terms and conditions. This occurs whenever a buyer finances or plans to lease a vehicle. Yet, any Charlotte or Ballantyne driver has some rights on their own:

  • You have to be informed by the bank, or lending institution, when your car is being sold at auction. Before it’s sold off, you have the option to purchase the car for the owed among, as well as any storage or repossession fees.
  • Depending on whoever is your lender, you might be able to reinstate the auto loan if you’re planning to pay the amount you’re behind on. This can also include repossession expenses.

Voluntary vs. Involuntary Repossession

“What happens when a car gets repoed?” can actually refer to two types of repossessing a vehicle. Many think of reality TV shows where the borrowers are seen yelling at the tow truck drivers and demanding they’ll destroy the car rather than lose it.

In reality, most repossessions are voluntary. Often buyers will contact the lender or leasing company to inform them they want the car to be repossessed as they can’t make the payment schedule. The buyer’s credit will still be affected, however it’s a superior option than doing nothing and hearing a tow truck pull up outside your home.

What is Deficiency Balance?

If the bank, or lending institution, sells your car for more than what you own on your loan, you’re entitled to the difference. However, if your car sells for less than what’s owed, the lender may proceed with legal action and get a “Deficiency Judgement” against you. As a result, you will be held responsible for paying the different, i.e. The Loan Amount that wasn’t covered by the vehicle’s sale.

How Long Does Repossession Stay on a Credit Report?

Any car repossession will stay in your credit history for seven years after the original delinquency. Repossessions can affect your credit score during these seven years, but the impact will wane during this period as well. If you’re planning to apply for an auto loan less than a year after the repossession, it will be outright denied by the lender.

Get Expert Advice From South Charlotte Chevrolet in Charlotte

Now that you know what happens when a car gets repoed, turn to South Charlotte Chevrolet for any car finance questions. We might help in getting you an installment loan to cover the outstanding loan’s cost to get your car back. We also know some fantastic places to get pizza near our Charlotte dealership as well. For more info, call us at (704) 323-8516 or online. See you shortly!

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