What Happens After a Car Has Been Repossessed?

Redeeming Your Car

Your creditor may allow you to retrieve your car if you can become current on your payments. This means paying all of your past-due payments as well as any fines assessed by the lender, which may include late fees and possibly a fee for having to hire a company to repossess your car. If you cannot afford these fees, you can still buy back your car by winning it at a public auction or repossession sale.

Selling the Car

Once a car is repossessed, the repo team returns the vehicle to the lender, who then intends to sell it to recoup the previous owner's missed payments. Like a home foreclosure, the lender must advertise the details of the car's sale or auction in a "commercially reasonable" way. This means it needs to take reasonable means to ensure that both the previous owner and the public know when and where the sale or auction will take place. This allows the previous owner to attend the sale and potentially make an offer on his old car, and it also gives the public a fair chance to purchase the vehicle.

Personal Property Inside the Car

Though the lender may be entitled to sell the car to settle its debts, in many states, it cannot sell any personal property inside the car that was purchased independently of the vehicle. This property, which can range from personal items, such as clothing or iPods, or electronics, such as speakers and CD players, belongs solely to the owner, and she has a right to have it returned to her. Once the car is seized, the lender must evaluate the vehicle to determine what items must be returned to the owner. Once a list is compiled, the lender will attempt to contact the car's previous owner with instruction on how she can retrieve the property.

Resources

• Vehicle Repossession: Understanding the Rules of the Road