How to get a repossessed car back in pa

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How to get a repossessed car back in pa

If you've fallen behind on your car payments and are worried about your vehicle getting repossessed, you might be wondering what your options are. Team Clark has heard from plenty of people over the years who can't make the payments on their vehicles for various reasons including unfavorable loan terms or changes in their financial situations. In this article, we'll cover how car repossession works and what you should do -- and shouldn't do -- if you're worried about your vehicle being repossessed. How Does Car Repossession Work? If you've missed only a payment or two, you're probably not in imminent danger of repossession. If that's the situation you're in, stop what you're doing and call your lender right now. In many states, your creditor has the right to take your car away if you miss even one payment, according to the Federal Trade Commission (FTC). But money expert Clark Howard says that rarely happens. "The most important thing if you know you're going to miss a payment is to get in touch and stay in touch with the lender and tell them the truth," Clark says. The lender may be willing to work with you -- we'll discuss that further below. If you have missed multiple payments on your auto loan, though, the law generally allows your lender to take back the vehicle from you -- often with little or no warning. They can also come onto your property to do that. Once your car has been repossessed, the lender may choose to resell the car to try to recoup some of the money that you owe. If that's the case, you'll still owe what's called the "deficiency." That's the difference between what you owe on the vehicle and what they were able to get by selling your car. "For example, if you owe $10,000 on the car and your creditor sells it for $7,500, the deficiency is $2,500 plus any other fees you owe under the contract," the FTC says on its website. "Those might include fees related to the repossession and early termination of your lease or early payoff of your financing." Beyond owing the lender that money, repossession can have other serious negative impacts on your financial life. Having your vehicle repossessed doesn't let you off the hook for the money you still owe on it. But in addition to that, you should be aware that there are other consequences of repossession that could haunt you well into the future. The first is that any late or missed payments on your auto loan can go on your credit report and stay there for seven years. Second, the repossession itself could be noted on your credit report and stay there for seven years after your first missed payment, according to credit reporting bureau Experian. In addition, the money you still owe if you can't make up the deficiency could go to collections, which can also stay on your credit report for seven years. Finally, there could be court judgments against you in the event that you are unable to pay. If that's the case, you may find yourself in need of legal representation. "Depending on what you have signed and what the facts of your case are, you need to see a lawyer," says Atlanta attorney and former Fulton County (Georgia) magistrate court judge Quinton Washington. "The entity that repossessed the car will likely have one." What You Can Do if You're Worried About Repossession So what can you do if you're struggling with payments and want to try to avoid repossession? Here are a few options. Communicate With Your Lender This is by far the best approach to staving off repossession. The key is to be proactive. This is true even if you haven't missed a payment yet, but are worried you might be in danger of doing so. You may be able to work out a deal, but communication with the lender is key. "The big thing not to do is hide from this," Clark says. "Because if you just don't tell them anything and you're not making your payments, they just proceed on a regular track of doing a repossession of your vehicle." Remember, this isn't a negotiation since the lender holds all the chips. It's really just about being honest about your situation and seeing if the lender willing to work with you on a plan. Another thing you can try to do is to refinance your auto loan to make the payments more manageable. This may not be possible if you have a low credit score or already have negative marks for missed payments on your credit report, but it could be worth a shot if you made the mistake of getting a loan with bad terms to begin with. "Most people's car loans are at rates that are way too high, especially for people who have good credit scores," Clark says. Here's how to go about refinancing an auto loan. Sell the Car Finally, you can try to avoid some of the headaches associated with repossession by selling the vehicle and paying off the loan balance before your car is repossessed. Keep in mind that you will still owe the difference between the payoff amount on your loan and what you are able to get for the vehicle in a sale. It's also possible to buy the car yourself after repossession and then sell it, according to Washington. "If your car gets repossessed, watch for the notice of sale from the creditor. It traditionally will come as certified mail and within 10 days of repossession," he says. At that point, you can let the creditor know that you want to buy the vehicle. "The car can be purchased before it is sold at auction, but you must notify the seller immediately -- before the car is sold -- by certified letter," Washington says. What NOT to Do if You're Worried About Repossession If you're facing repossession, we've laid out some options above. But you might be getting some other advice. Here's what you shouldn't do if you're worried about your car being taken from you. Trade In a Car You Owe Money On You might be tempted to trade in a vehicle you can't afford for a different one. This could work, but you should be aware of the potential pitfalls. The first is that there's no guarantee the dealer will make you square. "You're trusting that the dealer you're trading the vehicle in to is going to pay off the loan on that trade-in," Clark says. However, the dealer has no legal obligation to do that. "You signed the note originally for the vehicle you traded in," Clark says. The second danger is in rolling the amount you owe on the current vehicle into the note for the new one. That leaves you in essentially the same position you're were already in -- or worse. "What happens is such an unbelievable disaster that it may take you years and years to recover," Clark says. Read more about the dangers of trading in a car you owe money on here. Do a `Voluntarily Repossession' You might have been told you can be proactive about the situation and relinquish the vehicle to avoid the repercussions of repossession. Clark says this simply isn't true. "People also have this mistaken impression that they can do a voluntary repossession and that will be better for their credit than if it's an involuntary repossession," he says. "It makes no difference. You still have a repo. And having a repo is no good under any circumstances." Try to Hide the Car Finally, some people think that if they just hide their vehicle they can avoid repossession. This is just a bad idea all the way around. "People do the most amazing things," Clark says. "They'll paint the car, they'll change the tag on the car, they won't park it at their own house or workplace. They'll do all kinds of things to hide it from the lender. I don't recommend any of those devious things." In fact, doing any of these things can only double your trouble from a legal standpoint. "If you keep riding around in a car you have not been paying for as agreed, the owner can take out a felony warrant against you for theft by conversion," Washington says. "It means you are depriving the rightful owner of use of the vehicle. The punishment can be more than a year in prison." More Content From : Whether or not your car can be repossessed if you have the title depends on several factors, including state laws. The key factor is whether you have a clear title to the vehicle, because just possessing the title may not be enough. You may want to consult a local attorney for more specific information. A lien holder has the right to take possession of your vehicle if your loan is in default due to late payments. A lien holder is the company that provided the funds for the loan. Based on the Uniform Commercial Code Article 9, the lien holder can take the vehicle once the default occurs without receiving court approval or going through the judicial process. The lien holder can also sell the vehicle once it's in its possession. The title, or the pink slip, is a legal form that denotes ownership of the vehicle. The slip comes from the DMV and states your name as the legal owner of the car. When there is a loan outstanding on the car, the title will indicate the name and address of the lien holder on the title. Once a vehicle loan is paid in full, the lien holder should send you a release that states there is no lien on the vehicle and you own the vehicle with a clear title. The document should be filed with the DMV so ownership can be reflected on your registration. If the title is in your name alone and the vehicle has not been used as collateral in any additional loan, then there cannot be a repossession of your vehicle. This is because for a repossession to occur, someone other than you must have a legal interest in the vehicle. If, for example, there is a co-owner on the title with you, then the co-owner must also not have used the car as collateral or placed any loans on the vehicle. If there are no loans by either of you on the vehicle, then your car cannot be repossessed. Although your car cannot be repossessed when you have a clear title, the car may be taken by other legal means. A car can be taken as payment for a different debt where the creditor has obtained a judgment, or in a family law case where the court orders the vehicle transferred to the other spouse. A bankruptcy court can also order the vehicle sold and the proceeds used as part of the repayment procedure. Repossession happens more often than you might think. According to the Auto Auction Mall, which specializes in these deals, approximately 2.4 million autos were repossessed in the United States during the first nine months of 2019. That works out to more than 6,000 repossessions a day. There are certainly repo cars for sale out there, and you can find repossessed vehicles if you know where to look. Whether buying one is the right move for you depends on a few factors. It's possible for lenders to repossess vehicles because auto loan contracts invariably stipulate that they ? not the borrower ? own the car until it's paid off. The lender holds the legal title to the vehicle. They're therefore perfectly within their right to send a tow truck to collect the car if the borrower defaults on the loan, typically by failing to make three or more monthly payments. The lender doesn't have to take the owner to court first to get permission to repossess. And that three-month deadline isn't carved in stone. The law provides for only a 10-day delinquency in some states, and it could be even less in some areas. The catch here is that the lender really doesn't want the car. It wants the borrower to catch up on late payments and remain current heading forward, and some lenders are willing to work with borrowers to reach this solution instead. Read More: What Happens If You Miss a Car Payment? You'll most likely pay less ? sometimes a lot less ? if you buy a repo car rather than a new car or a used car from a dealer's lot. Repo cars are typically priced well under market value. Auto Auction Mall indicates that these cars can sell for as much as 40 percent less. On the downside, there's that old saying that you get what you pay for, and you're paying for a vehicle that someone else couldn't afford. There's at least a fair chance that they didn't spend anything on maintaining the car when they couldn't even afford to make payments. Then there's the matter of human emotion. It's not unheard of for consumers to "trash" their cars when they know the repo man is coming. You can almost certainly forget about your repo car coming to you with any kind of warranty or guarantee, and it's a long shot that you'll be able to test drive it, either ? depending on where you buy it. Perhaps the best way to buy a repossessed car is if you know the borrower well ? maybe they're your sibling or a good friend, and they confided in you. The lender is obligated to inform the defaulted borrower of when and where the vehicle will be sold after repossession. This gives the borrower ? or a friend or relative ? the ability to take steps to "redeem" or buy back the car. It's sometimes possible to buy a repo car directly from the repossessing lender even if you don't know the borrower, but you'll have to identify those that make direct sales to buyers. Some prefer to use "repo seller" companies instead. Contact banks and credit unions and ask for their repo files. The lender might even be willing to provide you with financing in exchange for taking one of these cars off its hands, particularly if you're an existing customer who holds an account or two with them. You have to make an offer or bid on the vehicle, and you might not be the only one to do so. This could result in a bidding war, so this approach might take several weeks. And you can almost certainly count on the vehicle not having been cleaned up or repaired in any way. On the bright side, you could have access to the car before actually buying it. A test drive might not be possible, but you could take along your friendly neighborhood mechanic or someone else who's auto-inclined to look it over for you. In any case, keep in mind that you're buying the vehicle "as is." Read More: 10 Tips for Used Car Shopping Another option is to buy from a car dealership that sells used cars ? and most do. It's not unheard of for dealers to get at least a portion of their used car inventories from repo auctions. In fact, it's relatively common. A dealer will almost certainly have cleaned up the car ? aesthetically, structurally and mechanically ? before depositing it on the lot for sale. You might even be able to get a mini-warranty if you buy a repo this way. It won't be extended, but it might cover you for a month or so. You might even be able to get financing directly from the dealer. You won't get a rock-bottom price with a dealer like you would if you approached the lender directly, however. The bank is just trying to recoup some of the money it has tied up in the vehicle. A dealer wants to make a profit. You'll probably pay the average used car price for the model, which negates a lot of the reason for buying a repo in the first place. But this doesn't mean that you can't at least try to negotiate. You can also purchase a repossessed car from the middleman rather than from the bank who first repossessed it or a used car dealer who grabbed it at auction. You can attend an auction yourself, if you can find one that's open to the public. But you'll probably be sharing the space with and bidding against many experienced auto dealers. You must typically register ahead of the actual auction date, and there might be a fee, but this will allow you to take a look at the available cars that are about to be sold. Online auctions might require that you have a dealer license. Some auctions are offered by reseller services, either in person or online. These sellers want to make a profit, too, although typically not to the extent that a used car dealer would. Some prefer to sell a high volume of vehicles rather than strive to get top dollar for each one. Other auctions are offered by state and local governments, although these vehicles typically don't end up for sale because of delinquent car payments. They've been impounded for some reason, and the owner hasn't redeemed them. In either case, you might feel a bit over your head if you find yourself bidding against experienced dealers in a fast-paced sale ? which you probably will ? so you might want to register and attend a few auctions in advance to get the lay of the land and to make sure you understand the rules. You might have to make the purchase in cash or have a loan approval in hand. These cars might not be cleaned up or repaired, either, although you might have better luck with this if you go to an online seller or a reputable reseller service. Again, you're buying "as is" at an auction, so take advantage of any opportunity to inspect the vehicle first. You're typically offered access before the bidding starts. Read More: How Much Do Dealers Pay for Cars at Auctions?

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