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If your car has been repossessed, you might be worried about whether you can get it back. The good news is that if you act fast, you probably can. Here’s everything you need to know about reclaiming a repossessed car.
Can you get your car back after a repossession?
Yes, you can get your car back after a repossession in most states. The easiest way to do this is to contact your lender and ask to reinstate your auto loan, although there are other methods you can try, which we cover in the section below.
However, you’ll need to act quickly. You often only have a few weeks to get a repossessed car back before your lender can sell it. 1
For example, in Massachusetts, your creditor can sell your car if you haven’t made arrangements to repay part or all of your loan within 20 days. 2
5 ways to get your car back from the repo man
You might be able to recover your car after a repo by doing any of the following:
1. Reinstate your car loan
Depending on the laws in your state, you might be able to reinstate your loan by paying off your overdue bills to get your car back. You’ll also need to cover the costs of the repossession (e.g., storage and towing fees), possibly plus one or two payments in advance. Contact your lender and ask about their loan reinstatement policy if you’re interested in this option.
2. Renegotiate with your lender
If you can’t manage the original terms of your car loan, you may still be able to reach an agreement with your lender. For example, if you missed four payments but you can only afford to pay three, you can ask whether it’s possible to make up the other overdue payment later on. You could also try asking about a new payment plan or refinancing the car loan.
Pursuing this option is much more feasible before your car gets repossessed, but it might still work afterward. If your car is unlikely to sell for much (meaning your lender will have a tough time recouping their losses on the loan), they’ll probably be keen to reach some kind of agreement with you.
3. Redeem your loan
If you’re able to get ahold of enough money to pay your entire debt—including your late payments, the remaining balance, and the cost of the repossession—there’s a good chance your lender will take you up on it.
4. Buy your car back at auction
If you’ve missed the deadline to redeem or reinstate your loan and your lender decides to sell your car to a private buyer, you probably can’t stop them. Fortunately, if they’re selling the vehicle at a public auction, they legally have to tell you when and where the auction is taking place to give you the chance to buy it back. 3
5. File for bankruptcy
You may also be able to get your car back by filing for bankruptcy, as long as you do so before your car is sold.
When you file for bankruptcy, it results in an order called an “automatic stay,” which means that most creditors have to stop trying to collect any money from you. As such, they’re not allowed to do the following:
- Repossess your car (if they haven’t already done that).
- Sell your car if they’ve already repossessed it.
The automatic stay will prevent them from moving forward with the repossession in the short term, but they can take you to court to fight it, so it isn’t a permanent solution. Your options and outlook for keeping your car ultimately depend on several factors, including your local and state laws and the type of bankruptcy you file for (chapter 7 or chapter 13).
Bankruptcy is an extreme step, so if you’re considering it to keep your car, consult with an attorney first to make sure it will actually accomplish your goal of keeping your car.
Do I still owe my lender if I don’t get my car back?
If you aren’t able to get your car back, you’d expect the silver lining to be that you won’t owe your lender a debt anymore. Unfortunately, this isn’t always true. It depends on how much your car sells for.
Let’s say your car sells for less than your debt is worth. In this case, you still have to pay your lender the difference (known as the deficiency balance). For example, if you owe $10,000 on the car and your lender sells it for $8,000, the deficiency balance is $2,000, plus any other fees you owe subject to the contract.
If you don’t pay, your lender can file a lawsuit against you to get a court judgment ordering you to repay the debt. 4
Leveraging a deficiency balance to remove the repo from your credit report
If there’s a deficiency left after your car is repossessed, you can propose a deal known as pay for delete, where you pay off your outstanding debt in exchange for your creditor removing the repo from your credit report.
If you manage to negotiate this, get the details in writing before you make any payments.
What if your car sells for more than your debt is worth?
There are instances where you won’t owe your lender anything once they’ve repossessed your car—they’ll owe you. If your car sells for more than your debt is worth, your lender has to give you the extra funds.
Contact your state consumer protection office to find out what your rights are and how the repossession process works in your area.