Have you ever felt stripped of your dreams? If not, just ask someone whose car has been repossessed.
When people consider what it is to have a perfect life, owning a car is always part of the list. Coming out of the agency with a new or used car is one of the best feelings one can have. Now imagine stepping out of your house and seeing that the vehicle you bought with so much sacrifice and love is not waiting for you out there.
When you purchase a vehicle through a car-leasing or car-financing scheme, the lender will be the legal owner of the car until you repay the loan in full.
Therefore, if you default on a monthly payment, the lender has the legal right to repossess the car. Needless to say, car repossession can have a significant impact on your life, for several reasons:
First: - It is terribly embarrassing. Especially if the repo man takes away your car in front of neighbors and family.
Second. -It can hurt your financial situation. A car repossession can stay on your credit history for seven years. So, on top of losing your car, your financial record will have a bad mark.
Reasons for Repossession
Several situations can end up in your car being repossessed. The two most common reasons why your car is being taken away is that you probably have fallen behind your car payments. By falling behind, we mean that you are at least 90 days late in making your car payment. Another situation where you might fall prey to repossession is when you are unable to renew your car insurance, which was one of the requirements in the loan contract. Any other way you breach your loan payments will put you in a bad situation, one that could take years to resolve.
The difference between the time a car owner began to default on the payment and the point of repossession vary from state to state. While some states do not allow car repossession, there are places where people lose their car to repossession in a single day. There are two types of auto loan borrowers. The first ones are those who make timely payments, and then there is the second type who delay their payments
- Timeline for Repossession
The timeframe between the moment when the car owner defaults on a payment and when the car vehicle is repossessed, varies from state to state. While some states do not allow car repossessions, there are others where repossession can take place in a single day. The amount of time it will take the lender to decide on the repossession of your vehicle could depend on whether you have made your payments on time, or whether you were repeatedly late or defaulted on them.
Two Types of Auto Borrowers: Those Who Make Timely Payments, and Those Who Don´t.
If you have defaulted on just a single payment, your lender might give you some time to make up for missing the date. You can request a deferral if you explain your financial woes, too. But if you have been late on your payments before, the lender has the right to repossess the vehicle even if your current payment has been delayed by one day only.
Some Myths Surrounding Car Repossession.
Many borrowers believe that the lender will wait for at least three months after a payment default before they hire a repo man to take the car away. The automobile financing parties have all the legal rights to repossess a vehicle at their discretion. As per the laws, a car financer is not legally obligated to give any amount of time to the borrower before repossession.
Many borrowers also believe that by making a partial payment, they will save their car from being repossessed, but it’s nothing but a myth. Yes, partial payment does make the lender feel better, but they have their own obligations to meet, so partial payment is not always enough.
Stopping a Car Repossession
It is not easy for people to let go of something they genuinely love. Given that cars are men’s best friends, nothing can be worse than a situation when someone takes away their precious vehicle. So, if you are worried about your car being repossessed, here are some things you may do to prevent it.
1. Notify the Lender About your Situation.
People may be hesitant to talk to a lender to discuss their financial woes, but if you want to save your car from repossession, you need to open up about your money problems with the lender. Explain your situation, and if they are nice, they may even revisit the payment plan.
2. Declaring bankruptcy As Last Resort
Declaring bankruptcy is another way in which you can stop the repossession of your car. However, bankruptcy should be the last resort. Do it only if you have come to the certainty that there is absolutely no other way to may your payment before you file for bankruptcy.
If Car has been Repossessed
-If your car is already in the hands of a repo man, there are still a few things you can try to get it back:
- Reinstate the loan
- Re-buy the car in an auction
- Negotiate with the lender
So, not everything is lost, as long as you are honest with the lender about your situation, you may find a way to keep the car. Nobody wins if the deal does work for you or the lender.
Used car dealerships like Shabana Motors located at 9811 SW Freeway in Houston, offers in-house financing and will also buy your car and will warranty your car for 2 years/24K miles, when passing Shabana Motors 5-star inspection process.