4 Tips for Getting Back a Car after Repossession
You may be subject to repossession of your vehicle if you used it as collateral to secure a loan. This is often the case with any car loan. However, it is also possible to use your automobile to secure a loan for another item, such as a personal loan or wedding loan. In any case, after a repossession, you should do everything you can to regain ownership of the vehicle. If not, you will lose all of the equity you have built in that asset.
#1 Check your Loan Contract
The first and most important thing you can do is review the terms of your loan contract. You are looking for the portion that discusses how and when your asset may be seized. This section will cover any procedural necessities, such as how often a lender needs to notify you and how many times before attempting repossession. Unfortunately, many car loan agreements give the lender a lot of liberty to repossess a car without notice. However, it never hurts to check the contract and ensure your lender is acting within the agreed upon terms to seize your asset.
#2 Submit a Written Request for Terms
If you find your lender had the right to seize your car, you will need to next consider any process that may allow you to recover it by restoring your loan to good standing. You may call your lender in order to discuss this. Even if you call, though, you should additionally write a formal written request for an explanation of the terms to restore your loan. The lender will have to respond in writing to this type of request. You will then have proof the lender agreed to allow you to reclaim the vehicle if you fulfill the terms.
#3 Fulfill the Required Terms
The next step is to fulfill the terms the lender gave you. Most lenders would rather you pay off the loan than forfeit the car. In most cases, the car is worth far less than is remaining on the loan. Even if you would be responsible to pay this difference, called a recourse loan, the lender is still likely to lose money on the repossession. You will likely have to bring all payments current. You will also have to pay fees associated with the repossession or impounding of your vehicle, which can be extremely high. Attempt to set up a payment plan for these items if necessary.
#4 Document Each Step
The most important thing to recognize in this process is you are protected by the law from any unlawful seizure. When a lender issues you a loan, the lender signs a binding contract. From that point forward, the lender has a responsibility to answer your questions and provide you with certain business courtesies. You should document each step in writing. That way, if the lender does at any point violate these expected courtesies, you will be able to prove the violation in a court of law. Your testimony will mean little without written proof of the lender's transgressions.