How to Handle a Car Repossession

Know your rights if your car is repossessed.

If you've defaulted on your car payments, your car loan company has the law on its side. It is perfectly legal for the company to seize your car. Defaulting may be different for each company, so make sure you read your contracts carefully. Know your rights with a car repossession so you can handle it professionally and properly.

Instructions

1. Allow the repossession company to seize the car, and don't try to stop it. The company is protected by the law, and if you assault or even verbally abuse its representatives, action could be brought against you. It's best to handle the repossession professionally, and work on getting the car back later.

2. Read your contract to discern how you defaulted. Gather check stubs and receipts so you have a record of your payments and can discern at what point you defaulted. These receipts are also good evidence of your past prompt payments.

3. Note whether you've paid for at least 30 percent of the car's retail value through loans. If you have, try to work out a deal with the car loan company. If you've paid for 30 percent of the car, you are within your rights to negotiate a deal through which you pay all back payments, any late fees as well as the car repossession charges, and retain ownership of the car, assuming payments.

4. Recognize that if you haven't paid 30 percent of the car's value back through loans, your loan company can legally sell your car to try and recoup missed payments. However, try to work with the company to make a deal for a higher interest rate to keep the car. Speak to your account manager and see how flexible he is. If he will not loan the car back, you won't get it back and will need to look for a new car.

5. Pay your loans promptly and in full in the future. Make sure that when you purchase another car, it is well within your budget. Put your loan on auto-pay to be deducted from your account on the same day monthly so that you'll never be late again.

References

• Car Repossession rights