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Can I Get My Car Back If It Gets Repossessed?

  • Auto Refinance
  • Natasha Young
  • 13 minutes

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Getting your car back after a vehicle repossession is not easy. It‚Äôs basically you jumping through hoops. But that‚Äôs not gonna stop you, isn‚Äôt it?¬† The question, ‚ÄúCan I get my car back the same day it was repossessed?‚ÄĚ might have crossed your mind at least once.¬†

car repossesion

Can I get my car back if it gets repossessed? 

It is certainly, possible. 

Once your car is up for repossession, it is usually taken to a storage facility. Later, it gets all set for auction sales. You should communicate with your lender if you want your car back. They might be able to let you know what choices you have. You may have more than one choice, depending on why your car was repossessed. 

There are ways to reclaim your vehicle following repossession; it may take a few days or weeks. You usually have 15 to 30 days to work out a deal with your lender before you can get your car back. 

Auto loan default, which usually happens when payments aren’t made, is one of the most common reasons for a repo. Your car insurance might have lapsed, which is another reason. No matter the reason, you should talk to your lender and find your options.¬†

How much will I have to pay if my car is repossessed? 

When your lender takes back your car or another item, it usually sells it at an auction. If sales money doesn’t cover everything you owe the lender, which rarely happens, you might have to pay the difference. This is called a “deficiency” or “deficiency balance.”¬†

After the item is sold, the amount you still owe the lender is reduced by the sale price. Then, the cost of taking back the property, keeping it safe, and selling it is added to the difference. You are often to blame for that. 

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In about half of the states, you won’t be responsible for a deficiency balance if the amount you still owe or the amount you paid is less than a few thousand dollars. The rest of the states have no limits on how much you can owe after a car is repossessed.¬†

In your defense, if you find the sale not commercially reasonable. Then you can take legal action against the lender or even file for bankruptcy.  

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What are the repossession reversal options? 

There are repossession reversal options, but all of them require some money.

Redeeming your auto loan 

Redeeming your auto loan means paying off the entire loan balance on your car and any fees you had to pay during the repression process (like fees to the recovery company and storage fees) so that you own the car in full. This is usually not an option for most borrowers because it could mean paying a lot of money all at once. If you can pay it off and want the car back, it’s something to think about.¬†

Reinstating your auto loan 

Before your car was taken away, your lender should have sent you a notice¬†telling you that your car was going to be repossessed. You can usually find out the steps you need to take to get your auto loan back. Restarting a loan can mean different things, but usually, you have to make up any missed or late payments and agree to keep making payments. If you didn’t get this letter or lost it, call your lender and ask about getting your car loan back on track if you want to keep it.¬†

Buying the vehicle at auction 

When a car is taken back by its owner, it is usually auctioned. Most auto lenders sell repossessed cars to try to make up for the amount you still owe on your loan. You have the right to know when and where the auction for the car is, and you have the right to go to the auction and bid on the car. Even if you win, you’re still responsible for any remaining loan balance and probably the fees incurred during the repo process, such as recovery and storage fees. If you don’t win the auction, someone else will buy your car. The money you make at the auction goes toward paying off your loan, but if there is a “deficiency balance,” you still owe the lender that amount.¬†

Is it time to let your car go? 

Before you get your car back, you should consider why it was taken away. Ask yourself. 

  • Was the loan getting too much to pay?
  • Did you lose your job temporarily? Is your budget getting tighter?
  • Or did it break down, and you had to decide which bill to pay?¬†
  • Can you keep making payments on your loan if you pay it back?
  • Can you pay for insurance and repairs for your car?
  • What happens in the next few months if you have had trouble paying your car loan before?¬†

If your answers are not collectively positive. You should probably let your car go!

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Even if you can get your car back, a repossession will still appear on your credit report. The repossession won’t go away even if you repay the car loan. Let‚Äôs assume if you get the car back and it gets taken away again, you could have two repossessions from the same auto loan on your credit report.¬†

If you don’t think you can pay back the loan once you get the car, it might be better to give up the car and buy something less expensive to get by. You could also try to get a car loan that reports to the credit bureaus to improve your future credit.¬†

It can be hard to get approved for an auto loan after a repossession, and a repossession from less than a year ago can limit your options for a while. It could work well for you if you think you can pay the car loan on time once you get it back. But if you were having trouble before and nothing has changed, you might want to consider refinancing the car loan or giving up the car. 

Can I get my car back on the same day it was repossessed? 

Not everyone will be able to get their car back the same day it is repossessed. If you can’t get it back, you might want to start thinking about other cars. One of the only ways to get auto financing immediately after repo and for at least a year is to go through a buy here, pay here (BHPH) dealership. Most of the time, these dealers don’t look at your credit report, so a recent repossession might not be a problem. Most¬†car lenders won’t give you a loan if your repossessed car is less than a year old.

Steps to recover from a car repossession 

Figure out why your car was repossessed 

If you fell behind on your car payments, you may know why your car was taken away. Sometimes it’s not so clear what’s going on. In some states, a loan or lease agreement that says you have to get insurance but you don’t, can be seen as a default, and your car can be taken away. Before you jump to conclusions, call your lender to determine how to make things right.¬†

Find out if you can get your car back after it was taken away 

A bank or company that repossesses cars will usually let you get your car back if you pay off the loan in full and cover all the costs of repossession before the car is sold at auction. Sometimes, you can get the loan back and set up a new payment plan. In these cases, the repossession may not be taken off your credit report, but if you make a deal with your lender, your new payments will likely be shown (but not if you buy the car back at auction). Before you return your car, think about the following: 

Would you be able to pay for insurance, repairs, and gas if you got your car back? 

If you don’t fix things that need to be fixed or get into an accident without insurance, it could worsen your financial situation. And you still couldn’t get from A to B without gas. If you can’t pay for these costs, redeeming your car might not be the best way to save money.¬†

Do you have access to public transportation or a carpool you can afford? 

It might be better to take the bus or find another way to get to work than to try to get your loan back on track or pay the full balance and costs of repossession. 

Do you plan to file for bankruptcy? 

If you’re way behind on all your bills and cannot catch up, you may have already considered filing for bankruptcy. If you file for bankruptcy before the bank or repo agency sells your car, you may be able to keep it and plan to catch up on your pending payments. Consult your bankruptcy lawyer about whether this is possible with the type of bankruptcy you’re filing.¬†

Get a better understanding of your rights 

Even if your car is towed away, you are still protected in some ways: 

The car can be taken back by the lender or repo agency, but not the things inside

For example, if you leave your laptop in the car, the lender can’t take or sell it. In some states, the lender may have to tell you what’s inside the car and how you can get it back. If that isn’t true, you might need to ask. Most of the time, this doesn’t apply to things you’ve added to your car, like new wheels or a better sound system.¬†

No damage will be or should be done to your property

A repo agency, for example, cannot smash down your garage to access your car. You might want to talk to a consumer lawyer if your rights have been broken. 

If you sell the car, ask if you still have to pay.

When a bank or repo agency sells your car at an auction, you might think you don’t owe any more money. That doesn’t always happen.¬†

Say a bank gave you a $25,000 car loan, and you still owed $15,000 on it when you stopped paying. If the car was repossessed and sold at auction for $10,000, you might still owe $5,000 on the car plus the cost of a repossession, aka the deficiency balance. 

Deficit balances are common, especially if you bought a new car with your auto loan. Driving it off the lot, about 10% of a new car’s value can be lost. Even so, it is still the lender or repossession company’s job to ensure the sale is commercially reasonable. If the repossessed car is sold for a price much lower than its fair market value, you may be able to argue in court about the high deficiency balance.¬†

The account could be sent to collections if you do nothing about this deficiency balance. If the debt is still within the statute of limitations, the lender can also sue you for this amount. 

Accounts in collections can stay on your credit report for up to seven years, so if you have the money, it’s usually best to pay off the rest to protect your credit as much as possible.¬†

Try to improve your credit score

Most repossessions stay on your credit report for up to seven years, so waiting is a big part of getting your credit back afterward. But you can also fix your credit by paying your bills on time and working to pay off other debts. This way, your score will improve when your bad history falls off your credit report. 

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Bottom line 

You are getting your car back after a repossession is difficult. If your car has been repossessed, you are not alone; almost 2 million repossessions occur annually in the United States.¬†You are most likely in this situation because you cannot afford your present payments. You may not be able to come up with the funds to pay off your loan or even make back payments. A repossession can sometimes be the first step in getting your finances back on track. With time, you can rebuild your credit.¬†It’s time to look at your budget and figure out how you can make more financially responsible selections in the future.¬†

FAQs on car repossession

Can I get my personal property after a repossession? 

But unless it says so in the loan papers you signed, the creditor can’t keep or sell any other property. The creditor must also take reasonable steps to ensure that other people don’t steal or damage your things. So, you should be able to get your things back.¬†

Can a repossession be reversed? 

Your rights after being repossessed depend on the laws of your state. Some states have laws that say you have the right to get your car back after it has been repossessed. Most of these laws give you a certain amount of time after your car has been repossessed to pay any past-due payments and the cost of repossession to get it back. 

Does a repo go on your credit if you get the car back? 

In these cases, the repossession may not be taken off your credit report, but if you make a deal with your lender, your new payments will likely be shown (but not if you buy the car back at auction). 

Can you get repo-ed twice? 

Yes, it’s possible. Just two repossessions could completely ruin your credit. Even if the damage to your credit score gets better over time, having your car repossessed will still send huge red flags to auto lenders, who may be reluctant to lend you money or only offer you loans with interest rates that are too high to afford.¬†

Can you negotiate after repossession? 

You can still talk to them even after the lender takes the car back. Another option could be to talk to the lender about the late payments on your loan. 

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