To get a repossessed car back, you must pay the full overdue loan balance, repossession fees ($400–$500+, plus storage), and, in many cases, the remaining total loan balance, often within 10–20 days. If you cannot pay, the car is sold, and you may owe a "deficiency" (the difference between the sale price and what you owed).
California law provides borrowers the right to reinstate their loan after default. This means that if your vehicle is repossessed due to missed payments, you have the right to bring the loan current by paying all past-due amounts, plus any fees and charges, to regain possession of the vehicle.
To redeem your car, you typically need to pay the full amount necessary to bring the loan current. This includes not only the missed payments but also any interest, penalties, and fees that have accrued. On top of that, you'll likely need to cover additional repossession costs like towing and storage fees.
WHAT HAPPENS AFTER A VEHICLE IS REPOSSESSED IN CALIFORNIA? The consumer has the right to reinstate the contract (i.e. to catch up on their payments) or a right to redeem the contract (i.e. pay the entire amount that is owed).
Purchasing a car from a bank is often much cheaper than buying from a car dealer. This gap in price exists because repossessed cars usually have a history and could be in need of repairs or a new paint job. Some leased cars only require a few fixes, while others have bigger problems and end up costing more.
A partial payment might buy you a little time, but it will not prevent repossession. The loan is still considered in default, and it's up to the lender whether to cut you some slack.
While it can help you avoid additional fees, involuntary repossession still damages your credit score for up to seven years. You may still owe a deficiency balance if the car sells for less than what you owe.
Request a settlement
You can contact the lender or collections agency to ask if you can pay a flat amount to clear up the debt. This payment is known as a car loan settlement. The paid amount is often lower than the remaining balance.
Repossession Affects Your Credit
It is best for you to proactively address the situation and work with your lender to avoid repossession. But, if you have no other options, remember this is not the end of the world, and there are ways to rebuild your credit.
A car repossession is very bad for your credit, causing a significant drop (often 100+ points) and remaining on your report for up to seven years, making future loans harder and more expensive; it signals high risk to lenders, especially because it's usually preceded by missed payments, adding more negative marks and potentially a large deficiency balance.
You should pay off a repossession if you want your vehicle back (by paying the full loan + fees) or to avoid a large deficiency balance, which lenders can sue you for, but it won't erase the negative mark from your credit report immediately; paying it off might help you negotiate a "pay-for-delete" or at least stop collections, but your main goal is to stop further financial damage and collection calls.
Top 9 Repossessed Cars
Talking to Your Lender
Don't wait for the company to repossess your car. Many lenders will work with customers if they think you'll be able to pay soon, even if the payments are slightly late. You might be able to negotiate a delay in your payment or a revised schedule of payments.
Remaining loan balance – Even if a recovery company has come for your car, you still owe your entire loan balance until the vehicle is sold. Late or missing payments – Any late or missing payments that led to the repo are also still owed.
You may be able to pay to delete a repo. Contact your lender to see if they're willing to negotiate payments on what you owe. If they agree to a pay-to-delete and you pay the agreed amount in full, they'll request that the credit bureau(s) remove the repo from your credit report.
To return a car you can't afford, communicate with your lender to arrange a voluntary surrender, which is better for your credit than involuntary repossession but still hurts it and leaves you responsible for the "deficiency balance" (what you still owe after the car sells). Other options include selling it privately or trading it in, potentially at a loss, or using a dealer's buyback program, but always expect to pay the difference if the sale price is less than the loan balance.