How to Refinance a Repossessed Car

When you skip a series of car payments, your vehicle will be repossessed by either your dealership (if you bought the car without a loan) or your crediting institution (if you bought the car with a loan). Yet, it is entirely possible to get back your repossessed car if you have an otherwise clean financial record. Consider the following steps, arranged in order of effectiveness and convenience.

Instructions

1. Repay the remaining balance and the repossession fees on your car. Both the remaining balance and fees will be listed on your repossession notice.

2. Ask your lending institution for another automobile loan. Explain that your car has been repossessed--a highly undesirable situation for both you and your lending institution. Your bank will more than likely give you a loan or defer repossessing the car by 30 days. That's especially true if you have otherwise good credit.

3. Ask your car dealership to rearrange a new payment plan if you financed the car through the dealership itself. There is a chance your dealership may strike out a new deal with you by your paying lower payments on an installment plan that lasts for a longer amount of years.

4. Search for an auto loan company that specializes in people who need repossession refinancing. Such companies even accept loan applications from people with bad credit. You can find some listed in our Resources section.

5. Contact a repossession attorney or a bankruptcy attorney. This person can make it easier for you to get your car back by having you file for bankruptcy. Filing for bankruptcy may give you as much as five years to refinance your car.

6. Borrow money from a person close to you. Partially repay the car dealership or lending institution what you owe. Even offering a portion of the balance owed may heighten the bank's desire to negotiate with you.

Tips & Warnings

• Study your state's repossession laws. Repossession procedures differ with every state.

• Only borrow money as a last resort. It is much wiser to try to obtain a loan rather than risk a personal relationship over money. Act quickly once your car has been repossessed. It is a matter of days--not months--until a lending institution may sell the car at auction.

Resources

• Read this Article in Spanish
• Suggested solutions on how to avoid car repossession
• One example of a company that offers auto loans to those with poor credit
• A Q&A article on repossession, including information on filing for bankruptcy
• Westlake Financial Services (subprime car lending)