If you own or are leasing a vehicle, you risk having your car being repossessed if you fall behind on your monthly payments. Losing a car to repossession is every driver’s worse nightmare, and one that is a very real possibility for drivers who either lease or still have payments left on their bought vehicle.
Having your vehicle repossessed means that someone drives a tow truck to your house, hooks up your vehicle and drives off with it, never to return. Whatever you paid on the vehicle is lost, and you will no longer have access to it. Cars are typically repossessed by companies hired by the creditor who loaned you money and who you haven’t paid back on time. If your car gets repossessed, it’s likely you’ll never see it again since your lender will probably sell it at auction within just a few days.
No one wants to have their car repoed, and fortunately, this doesn’t happen to many people, but it’s become more common since the economy tanked in recent years. You likely need your car to get to work, take your kids to school, and run daily errands, so getting your car repossessed is likely the last thing you want to see happen.
However, if you are unemployed or are facing any other type of financial difficulty, and you’ve fallen behind in your payments, then you may need to use this simple guide to avoid having your car repossessed.
Make Your Payments on Time
The most obvious piece of advice on how to avoid repossession of your car is to simply don’t let this ever become a possibility by always paying your car bill on time. Before you purchase a car or take out a lease, it is essential that you select a car that you can actually afford and know that you’ll most likely be able to pay it off within the required time frame. Only buy what you can afford and have some emergency savings stashed away and you should never have to worry about car repossession.
Contact Your Creditors
Don’t let your financial troubles reach the stage when the repo truck pulls up, take direct action long before this. If you’ve fallen behind on your car payments, you may be avoiding answering calls and opening mail from your creditors like the plague – but this is the absolute worst thing you can do. It’s important that you get in touch with your creditors as soon as the problem arises, because you may be able to negotiate a better deal, or at least an extension of some sort.
Take Out an Auto Title Loan
If you own your vehicle and have nearly paid off all of your payments, and are only behind one or two of the remaining payments left, you may qualify for an auto title loan. An auto title loan company will typically lend you the value of your car in return for ownership of your car’s title until you have repaid it back in full. While taking out an auto title loan will mean loading up on even more debt, it may just buy you enough time to get your finances in order and prevent from having your vehicle repossessed.
Sell Your Vehicle
Even if you still owe a lot on your car, it may be worth it long term to sell your car for avoiding car repossession. Car repossession will do a lot of damage to your credit score, so it may be more practical to let go of your car than risk the humiliation of repossession coupled with a plummeted credit score. Once you have sold your vehicle you won’t be completely out of the trenches yet, as you will still have to pay a certain amount to your creditors in order to settle your debt. This is a particularly good choice if you have a second car or another mode of transport available, but if neither of these are the case you may want to consider our other suggestions.
File for Bankruptcy
In some instances, you can keep your car, (even if it hasn’t been paid off in full) after you’ve successfully filed for bankruptcy. However, for most people facing bankruptcy this isn’t their best option as it will mean their credit score will be permanently tarnished and they will have to face the embarrassment of going bankrupt. This really should only be considered a viable option if you have mountains of debt (that isn’t just limited to your car, such as unpaid medical bills) and it is essential that you keep your car. Ideally, filing for bankruptcy should be your absolute last resort.
Know Your Rights
It isn’t unheard of for cars to be repossessed for unlawful reasons, and there may be some loopholes in your state’s laws that will make you immune from having your car repossessed. Therefore, if you are facing car repossession, check your state’s car repossession rights and laws before it’s too late. You may also want to contact a lawyer, who may be able to help you keep your car and even renegotiate a better repayment plan with your creditors.
Car Capital Financial
Just because you’ve fallen behind on car payments, this doesn’t have to guarantee that your car will be repossessed. Consider other options, such as taking out an auto title loan, which you may qualify for. Title loans are issued based on your ability to repay the loan.
Car Capital Financial is one of Southern California’s leading title loan companies, and we understand that financial hardship is sometimes out of your control and that it can be easy to lose track of bills and other payments. We provide auto title loans to residents from all over Southern California, and would love to help you get out of your financial difficulties. Call us today at 1-888-500-9887 to see if you qualify for a title loan today!