Auto Repossession 101

Having your car repossessed can feel very sudden, like a slap in the face. Many states don’t require any notice of repossession before a car is towed, and it can be done without a court oder. In some cases, it can be repossessed after only 30 days of no car payments on the loan. This article will answer some common questions about vehicle repossession, including why it happens, what the process is like, and how you can get your car back after it’s been repossessed.

There are two types of loans: secured loans and unsecured loans. Secured loans are loans taken out to buy a particular thing. Car loans are a typical example of a secured loan on personal property. Unsecured loans, like credit cards, medical bills, and student loans, aren’t secured by any property. Repossession happens when somebody stops paying their secured loans. When that happens, the creditor can take back the property securing the loan. The process of taking back this property is called repossession. Every state has its own laws about this process, including how quickly a company can repossess a car once you’re behind on the auto loan. Some states, like California, let lenders reclaim a car after even one missed payment. If you’re even 30 days late, your car might be in danger of being repossessed.

There are several steps in the process. First, you need to miss at least one monthly payment. Remember, state law varies. Some states have more protections, and make creditors wait before they can hire a repo company to come tow a car, while some let the creditor repossess your car after the first missed payment. After a missed payment or even a very late payment, the lender might be required to send you a letter saying that you are in default. This also depends on your state’s laws – with some states, you might not get any notice until you see a tow truck in your driveway.

After repossessing your car, the loan company is usually required to send you some sort of notice of repossession form. This paperwork lets you know that your car was repossessed, the full amount of money you owe on the car loan balance, late fees, towing costs, and storage fees. They’ll also have to give you a deadline to pay the amount in full if you want to keep your car.