Finding that your vehicle is on the repossession list can come as stressful news, but it is necessary to act strategically and quickly. Whether you are not able to pay the loan or missed payment due to any reason, following the right steps will help you save your vehicle or protect you from major financial damage.
In this article, we will learn more about vehicle repossession and the way to find out whether your vehicle is on the list or not. Also, we will go through the necessary steps you have to follow once you discover that your vehicle is on the list to minimize the overall damage.
What Is Vehicle Repossession?
Vehicle repossession refers to the act of vehicle seizing by the lender or a leasing company due to nonpayment of the loan. When you take a loan to buy a new vehicle, it acts as collateral for the lenders and leasing companies to secure the loan. In other words, the lender owns the car until you have cleared the entire loan amount. In case of a lease, you can rent the vehicle for 2 to 4 years.
The lenders or the leasing companies can repossess your vehicle when you miss a payment on your loan amount. However, in some states, they have to send a warning with all the details of the missed payment and a deadline to clear your missing payment. If you fail to meet the deadline, then they can take your vehicle. Your loan agreement will tell you at which point you will be in default if you miss a payment. There are basically two types of vehicle repossession namely, voluntary and involuntary. Let us go through their details.
Voluntary vehicle repossession: In this type of vehicle repossession, you inform your lender that you are not able to pay for your car loan and reach an agreement to give the vehicle back. You can negotiate the terms with the lender and come to a resolution that is favorable for both parties. Also, you don’t have to pay any fees that come with involuntary repossession.
Involuntary vehicle repossession: In this type of vehicle repossession, the lender will seize your vehicle because you were not able to clear your car loan payments on time. You have to pay a high fee charged by the lender or leasing company and the repossession can happen anytime without your knowledge.
No matter the type of vehicle repossession, it will have a significant impact on your credit score and you will lose your vehicle. It will stay on your credit report for 7 years after the date you failed to make the repayments of the loan.
What is a vehicle repossession list?
A vehicle repossession list is a record of cars that have been seized by lenders when the owners fail to repay their loans and leases for the vehicles. When the borrower defaults on their vehicle loan, the lender has the right to repossess the vehicle as collateral and sell it. All the details of the repossessed vehicles are then compiled into a list, which is often given to dealers, auction houses, or the public for resale of the vehicles.
How To Find Out If Your Vehicle Is On The Repossession List?
The repossession list of the lenders is not available to the public. If you have received any warning about the nonpayment of the vehicle loan, then your vehicle will be present on the list. Also, you can check with your specific lender to know the status of the list in case you have missed a loan payment.
What To Do If Your Car Is On The Vehicle Repossession List?
Get In Touch With Your Lender
The first thing to do once you know that your vehicle is on the repossession list is to contact your lender or leasing company. Don’t wait for them to repossess your vehicle and act immediately. You may be able to negotiate the terms of the loan repayment agreement and get a revised plan. Sometimes, the lender will allow you to repay the loan payments even if you are late on the pre-defined deadlines.
In case there has been a natural disaster, then your lender or the leasing company can give you a grace period, offer a revised repayment plan, remove the late fee, and even delay the repossession of your vehicle.
Carefully Read The Loan Agreement
You have to review and analyze your loan agreement to understand all the terms and your rights properly. The contract will outline the rights of the lender or the leasing company to repossess the vehicle and the specific conditions under which it occurs. With a clear understanding of all these details, you will be able to identify any possible breach or negotiate with your lender effectively for favorable outcomes.
Seek Professional Advice
When you are dealing with vehicle repossession, you can opt for professional advice from the experts for better outcomes. Financial advisors, credit counselors, or attorneys can help you explore different options. They offer expert guidance on negotiating with lenders or exploring debt relief strategies like bankruptcy or settlement agreements according to your specific case. Also, your repossession attorney can assess if any illegal practices occurred during the repossession process. With proper professional advice, you will be aware of all your rights and follow the right course of action to handle the entire process.
