Repossession is not the end of the world, though it is a serious financial setback with lasting consequences. It damages your credit score for up to seven years, but you can rebuild your credit over time. While it disrupts your life, it is possible to recover, and options exist to minimize the damage.
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.
It can be a decent option if you're having trouble with monthly payments on your car, if you're only able to make late payments, or if you're filing bankruptcy. Deciding if it's the right move depends on your personal situation and goals.
Foreclosure Starts And Repossessions Rise
Texas, Florida, California, Illinois, and New York reported the largest numbers of foreclosure starts, with major metropolitan areas such as New York City, Chicago, and Houston among the most affected.
The repo agent will follow you as you drive away. Once you stop and run in the store or into work, they'll pick it up and tow it way. It's not unheard of for repo agents to travel up and down the streets within a few blocks of your home or job looking for your vehicle.
Data from Cox Automotive shows repossessions increasing by 43% between 2022 and 2024. An estimated 3.22 million vehicles were repo'd through 2023 and 2024, compared to 2.43 million from 2020 and 2021. Rahkim Sabree, a financial therapist and consultant, believes 2025 might not fare any better when the year is done.
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.
Yes, voluntarily turning in your car (voluntary surrender) is generally better than having it involuntarily repossessed, as it gives you control, avoids extra fees, and may be viewed slightly better by future lenders, but both options severely damage your credit and can leave you owing a deficiency balance (the difference between what you owe and the car's sale price). It's a "best worst option" that allows for a cooperative exit, but exploring refinancing or selling the car first are often better financial moves, says Experian.
2021-2022 most repossessed car and truck (in order)
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.
The Hardest Car Brands to Steal (and Why)
The ban on sales of new diesel and petrol models is due to come into place in 2030. As part of the government's recent changes, full hybrid and plug-in hybrid models will be permitted to stay on sale until 2035.
You won't be forced to buy an electric car (EV) overnight, but government regulations (like the EPA's emissions rules) and state mandates (like California's 2035 ban on new gas car sales) are pushing automakers to sell more EVs, effectively making them the primary new vehicle option in many places by the 2030s, though this is subject to political and industry changes, with debates ongoing about consumer choice and affordability.
President Donald Trump signed a resolution on Thursday that blocks California's first-in-the-nation rule banning the sale of new gas-powered cars by 2035.
In most states, your lender can sue you for a deficiency judgment to collect the balance owed, as long as it followed the rules for repossession and sale.
Here's what repo agents can't do in most states:
They can't enter a locked garage to take your car. They can't open a locked gate or break a lock to access your property. They can't use physical force, damage property, or breach the peace to repossess a vehicle.