The concept of repossession can be intimidating if you aren’t fully informed. When someone takes your car against your will, it’s common to be overwhelmed and upset.
That said, knowing more about the process of repossession can save you if you’re in a tough spot. Not only that, but you can work to prevent repossession from happening in the future.
Here’s what you need to know to protect yourself and your vehicle.
What is Car Repossession?
In its simplest definition, repossession is the process of reclaiming an asset that should be paid off but isn’t. This can involve any kind of property, from real estate to artwork.
A car is often one of the first items taken in the repossession of assets. With pandemic protections expiring, many of the delays on bills and payments are coming to an end, meaning we may see an uptick in repossessions.
How does Car Repossession Work?
Repossession can technically happen as soon as you miss a payment. If your car is tied to a loan, missing any payment from that loan can result in repossession without notice.
However, most lenders go in order of priority and tend not to go after first-time offenders, usually going after second- or third-time offenders first. There are many states where it is legal for the repo agent to step onto your property to seize the car and have it removed. However, this isn’t true everywhere.
If you choose to hide your car, it may result in increased fees, especially if this goes on for an extended period of time. However, hiding your car usually won’t be easy anyway, as repo agents tend to scope parking lots around the person’s property and workplace to locate the car if it isn’t somewhere prominent.
How to Avoid Repossession
Since it’s technically legal for a lender to seize your car without notice as soon as you’re in default, the best way to avoid repossession is to pay your bills on time and make sure you stay up to date with all of the details.
If you do happen to miss a payment, make sure you make it up quickly. This might not always be possible, but trying your best to make payments in a timely fashion can save you from trouble down the road.
Steps to Take After Repossession
If your car has been repossessed, your best option is to contact the lender to bring your payments up to date and settle the debt.
If possible, you should bring the debt back to zero and pay it in full to avoid penalties and get your vehicle back. Financially, there isn’t a good way around the situation.
Know your Rights
If you think your car might be repossessed or your car has already been repossessed, it’s essential to know your rights in the situation. While certain states allow repo agents to come onto private property, not every state does, and you can check if your state is one of them.
You also have the opportunity to reinstate your ownership of the car if you pay off your debts in full. Additionally, you still have the right to any personal property left in the car, as it was not in the initial agreement or contract when you bought the car.
Many repo agents will only give you 30 days to collect that personal property, so you may want to do it sooner rather than later.
Car Repossession and How to Handle It
Nobody should have to go through the process of repossession. But if it does happen, you should be prepared. By knowing your rights and paying your bills on time, you’ll remain in the clear.
Martin Banks is the Founder and Editor-in-Chief of Modded. He covers the world of cars, driving, tech, and more.