QandAs: Autos

What happens if my car is repossessed?

Answer:
If you have financed your vehicle, you should know

that you don’t own it until the last cent is paid in full – until then, the creditor (institution who holds the loan) has the right under law to take the vehicle back if you default on your loan. Not only that, but if they sell your vehicle, you will continue to owe the difference if the sales' price is lower than the loan amount.

The actual rules for default are different in each state – but your contract should state them. Sometimes, being late by as little as one day is considered default, and the creditor then has the right to take your car without warning.

If your car has been repossessed, first check out your contract. Be sure the creditor didn’t break any of the contract’s rules when repossessing – although they can take your car from the street or the driveway without your permission, they cannot break into your garage, for example, to get the vehicle. If you believe the creditor caused a ‘breach of peace’ (went beyond repossession laws in your state), you should get an attorney; the creditor may forfeit some of his rights and even owe you reparation if you can prove a breach of peace.

If everything was done by the book, however, then check with your state’s consumer protection agency. This agency will let you know your state’s laws concerning buying back your vehicle (if you are interested in doing so). Also, the creditor has to inform you of the date of a public auction, if there will be one, so that you can participate if you choose. If the auction will be private, you must be notified of the time you have to try and buy back the car before the auction. Either way, you have options, if you choose to pursue it.