How To Keep Your Car On The Road
Your Car Just Got Repoed:
What Now?
From the staff of RepoIntel.com
The morning light breaks, the alarm blares, and work beckons. But rushing out the door, you find an empty parking slot. The new Toyota RAV 4, a prize you’ve hustled, scrimped and saved for is gone! Missing. Vanished.
Congratulations – you’ve been repoed.
If your car got repossessed, or you’re at risk of having it repoed, understanding the process (and your rights) is essential. RepoIntel.com’s primer for the newcomer will walk you through what happened, how many payments can you missed before repo, and an often asked one, “How soon can I get my repossessed car back?”
‘I missed my final payment on this car (yes I’m dumb) and I didn’t know until my car was towed this morning,’ he wrote. To get the vehicle back he claims to have settled all the fees plus a final payment. In an update he added, ‘…And was able to get my car back this morning with no other issues….Lesson learned the hard way….’
Repossession At Its Root
So, starting at the beginning is the most common query: How many missed car payments before repo? Well, that depends, but usually bankers begin the repossession process after a few months of missed payments, although the timeline varies based on the creditor and state laws.
According to the finance company, Ramsey Solutions, being repoed can loom for a borrower after only getting 3 months behind on car payment. Some states, like Texas and Florida, technically can green light the process in just 1.
A real example? The Unhunghero69 on the Reddit sub thread, r/askcarguys, cites his scrape with repossession.
“I missed my final payment on this car (yes I’m dumb) and I didn’t know until my car was towed this morning,” he wrote. To get the vehicle back he claims to have settled all the fees plus a final payment. In an update he added, “…And was able to get my car back this morning with no other issues….Lesson learned the hard way….”
Behind $1000 to creditors, one subject chose the vehicle over rent, with the worry of repo agents taking her sleep too, according to an NBC profile on YouTube.
Dawn Hurley made it plain that her auto was a lifeline. How many days a week did she need the car, asked the interviewer. “Seven…and a half,” Hurley laughed.
Don’t Fear The Repo Reaper
Always, the most important step before being repoed is to contact the creditor. Communication is one of the best tools in the early stages to help you avoid the resentment of saying my car got repossessed, stressed Bruce McClary, spokesperson from the National Foundation for Credit Counseling. (Recognized as a financial expert, McClary has been featured in publications like Forbes, The Pennyhoarder, and Nerdwallet.)
The bank might even offer solutions like payment deferrals or restructuring the loan to reduce the monthly payment, he said. One of the reasons is cost: the repossession process for lender is expensive, compounded by a nationwide shortage of repo agents.
However, if you do miss multiple payments and your car got repossessed, there are still options available.
How To Get A Repo Car Back
Once your car is repoed, the creditor will want the “deficiency balance.” It means the vehicle goes on the block at an auto auction to recover the loan’s remainder. Still, before the sale, you have certain rights – of course depending on your state. Many require lenders to provide a notice of default and the “right to cure,” allowing you a time window to fix the problem.
“…The borrower can pay past due fees and repossession expenses as a way to reinstate the contract and get their motor vehicle back,” so reports McGlinchey.com, in the story “Post-repossession: Can a Borrower ‘Cure’ a Default and Get Their Car Back?”.
However, the “right to redeem” is a different matter, says the website. Here, the borrower must pay the entire amount on the contract to get the car back before it’s sold.
‘…If you don’t make payments on the outstanding balance, your lender could take legal action against you. They may decide to take you to court and ask for wage garnishments or place a freeze on your bank account until your debt has been repaid.’
Ramseysolutions.com
Though not all states provide reinstatement of a repoed vehicle, those that do commonly have a 10- to 21-day interval. Texas, which has the largest amount of car repossession, gives no right to cure. Yet it does demand the loan institution offer the right to redeem before selling the car.
Then there are the extras, repossession fees – a tricky category. With towing and storage, they can be hefty.
According Carcaramel.com, housing a repossessed car can run between $50 and $100 a day, with the lender’s portion – in addition to the loan balance – from $200 to $400.
Going, Going…Gone: Repo Cars For Sale
If you can’t reinstate or redeem the vehicle, the lender will sell it at auction. Unfortunately, bank repo vehicles often sell for less than the loan balance, leaving you with that dreaded deficiency balance.
For example, if you had a balance of $25,000 and your banker was only able to sell your car for $15,000, you would still be responsible for paying back the $10,000 difference, said Capital One.
And It could get worse.
“…If you don’t make payments on the outstanding balance, your lender could take legal action against you. They may decide to take you to court and ask for wage garnishments or place a freeze on your bank account until your debt has been repaid,” writes the website.
However, Ramsey Solutions said that, in its experience, the loan companies likely will close out the note with you for around 25 cents on the dollar.
“So, if you owed $9,000, the bank would probably settle for around $2,250,” the website reported, although again it’s creditor and state specific.
Evading A Repossession Repeat
The true path to avoiding being repoed again is to get a cheap, used car, continued Ramsey Soluntions. Pay cash and in full. “…You can do it knowing you’ll never have to worry about the repo man taking your car from you. It’s yours!”
Nearly all financial and car experts agree the simplest method to avoid a future repossession mistake is the easiest: budget accordingly.
Because you control the finances; you know where the money is going so you can keep car payments in sight and get back on track if the situation starts to spiral; and by sticking to a budget you can pay off the car loan early.
Conclusion
If you’re at risk of being repoed, top consultants say be proactive. Reaching out to your banker, understanding your rights, and making up missed payments quickly can help you avoid the pain and the shame. And even if your car got repossessed, you still have options to recover it – whether through reinstatement, redemption, or negotiation.
Reportedly, as a former repo man, Russ8827 furnished his wisdom on r/poor, a sub-Reddit.
“I have seen every walks of life from rich to poor being repoed….It’s nothing to be embarrassed about and isn’t necessarily your fault,” he wrote. “People’s situations change all the time (and) we can’t always afford what we once could….
“Don’t let it get you down, just dust yourself off and move on.”
Sources for the story:
https://www.ramseysolutions.com/debt/car-repossession
https://www.reddit.com/r/poor/comments
https://www.reddit.com/r/askcarguys/comments
https://carcaramel.com/how-much-are-storage-fees-for-repo-cars/
https://www.capitalone.com/cars/learn/managing-your-money-wisely/what-is-a-deficiency-balance/3224
