Act Quickly Before the Car is Sold
Time is not on your side. After a vehicle repossession, the lender can move fast—sometimes within a few days—to prepare the repossessed car for sale. The longer you wait, the harder it becomes to undo the damage. If you act quickly, you may still be able to redeem the car before it’s sold through a public auction or private sale.
Redemption means paying the full amount due on your loan, including missed payments, late fees, repossession and storage fees, legal fees, and any other applicable fees. If you have enough money, paying this lump sum can get your car back and stop the process in its tracks.
Understand the Repossession Costs You’ll Face
Returning your car after repossession is rarely as simple as paying what you missed. You’re also on the hook for a laundry list of repossession costs. These can include towing charges, storage fees, and administrative costs imposed by the repossession company. If legal action has started, legal fees may also apply.
Don’t assume the lender will waive these fees. The longer your car sits in storage, the more you owe. If the total amount becomes unmanageable, the lender may refuse to release the vehicle unless paid in full.
Ask About a New Payment Plan
If paying the full amount at once feels like trying to climb a mountain in flip-flops, ask the lender if they’re open to a new payment plan. Some lenders will allow you to reinstate your loan by catching up on past-due payments rather than paying the entire balance. This could include missed loan payments, late fees, and applicable charges, but not the full balance of the loan.
This option varies by lender and by your state’s laws. Some states require lenders to offer reinstatement as a legal right. Others leave it to the lender’s discretion. Either way, if you’re in trouble making payments, this could buy you time and help you avoid repossession altogether.
Know What Happens if the Car Is Sold
You still have rights if you don’t act in time and the car is sold at a public auction or through a private sale. The lender must sell the vehicle commercially reasonably, meaning they can’t dump it below market value just to be rid of it. The sale proceeds will cover the repossession costs, then your loan balance. If there’s money left over, you’re entitled to that surplus.
But more often than not, the car sells for less than what you owe. That leaves you with a deficiency balance—the difference between your loan balance and the fair market value the car sells for. This amount becomes your new debt. The lender can pursue you for it, report it to the credit bureaus, or even file a lawsuit to collect.
Recover Your Personal Belongings
Many people panic about the car but forget about their personal property inside. Once the vehicle is repossessed, the agent must inventory and secure your belongings. However, they are not required to store aftermarket additions to the car.
You have the right to retrieve your personal belongings. Contact the repossession company immediately and schedule a pickup. Don’t delay; some storage yards only hold items briefly before discarding them.
