Your car hasn't been repossessed yet likely because lenders often wait weeks or months, especially for good customers, to avoid costs, preferring to work with you through payment plans, deferrals, or grace periods, but repossession can happen anytime after default without notice, especially if you've ignored communications or have a history of late payments, and can be triggered by remote "kill switches".
WHAT IF THE LENDER DOESN'T REPOSSESS YOUR CAR? This means that: You are stuck with it – if the lender doesn't come to pick up the car. You can't sell it – because the lender still has the lien, and selling it would be committing a theft.
Although creditors usually wait until your payment is at least three months late before they bring in any repo agents, many will choose to begin repossession actions with only one late payment.
The Repossession Process in California
However, that doesn't mean repossession is immediate or inevitable. Most lenders do not rush to repossess after a single missed payment. Repossession is expensive and time-consuming for them too. It often doesn't happen until the borrower is at least 60 to 90 days past due.
The repo guys will inform the police (so that people can know their car was repossessed not stolen). You also can't necessarily just wash your hands of it. If the car goes to auction and the bank doesn't recover all its money, it will come after you for the remainder.
Before repossession, the lender may send a notice of default or demand payment. However, in many states, they are not legally required to notify you before repossessing the vehicle. Once you default on your loan, the lender has the legal right to repossess the vehicle without a court order.
In a case where the lender is refusing to take back the vehicle they are essentially admitting that the vehicle is worthless.
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 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.
Alternatives to Voluntary Repossession
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.
Repossession happens when a lender takes back a car because the borrower has fallen behind on payments. Repo agents use personal details, social media, and tools like GPS trackers and license plate scanners to find vehicles.
Another alternative may involve negotiating over the arrears on your loan with the lender. Whether this is feasible may depend on the amount of the arrears, your previous interactions with the lender, and whether they are willing to negotiate. You might be able to refinance the loan or arrange for a new payment plan.
Repo Men Know Every Trick in the Book
So they may stake out your house for extended periods of time, survey the streets around your neighborhood, and even follow you when you go to the mall or grocery store. Since any public space is fair game, you may walk about of the store and find that your car is gone.
Yes, your credit score may still drop even if no one repossesses your car. On your credit report, it will show that you defaulted on your loan and have multiple missed payments. Even if the car is never repossessed, these missed payments and the defaulted loan will ding your credit on their own.