Before getting your car back, think through these questions:. If you got your car back, would you be able to afford insurance, maintenance and gas? Neglecting important repairs or getting into an accident while uninsured may land you in an even more difficult financial situation. Do you have access to affordable public transportation or a carpool? Getting to work by bus or other means may be a better option than reinstating your loan or paying your balance and repossession expenses in full.
Do you plan to declare bankruptcy? Even when your car is towed away, you still have certain protections:. The lender or repo agency can repossess the car but not the items inside. In some states, the bank or repo agency may be required to give you a list of items inside the car and tell you how you can retrieve them. Generally, this does not apply to accessories you may have installed in the car, such as new rims or a souped-up audio system.
If you feel that your rights have been violated, consider contacting a consumer lawyer. This is called a deficiency balance. Deficiency balances are common, especially when your auto loan was for a new car. If you ignore this deficiency balance entirely, the account may be sent to collections.
The lender can also sue you for this balance, generally, if the debt is within the statute of limitations. A repossession typically stays on your credit report for up to seven years , so a big part of restoring your credit afterward is just waiting. But you can also be proactive in restoring your credit by paying your bills on time and working on paying off other debt.
Sign up to get your free credit score and report from NerdWallet. Until that happens, keep the vehicle registered and maintain proper insurance. With this option, you might be able to keep and drive the car for many more years without receiving the legal title to it.
Another option is to park the vehicle in a secure, public location and send a copy of the keys via registered mail to the creditor. Again, you will want to keep your car insurance current until you confirm that the lender has repossessed the car. The risk for you here is that you will need to confirm that the car eventually was picked up by the proper entity.
There are also some practical issues if you pick this option. Specifically, many communities have strict rules about leaving cars on the street. You will need to visit and possibly move the car regularly. Each time you move it, contact the lender again. Finally, you can continue to call the lender every 48 hours until you talk someone into picking up the vehicle. This will take a lot of persistence on your part, but eventually, it should get the lender to act.
You can try to get a mailing address. Then you can mail a formal demand letter notifying them that their vehicle sits waiting to be picked up. They have the ability to repossess the car, but in some cases they may choose not to do so.
If you find yourself in that situation, it pays to be persistent. Keep trying to get the lender to pick up the vehicle.
This might require numerous phone calls and a calm demeanor as you try to find the right person who can help you. In the meantime, keep the registration and insurance information current if you do continue driving it. How We Make Money. Justin Harelik. Written by. Edited By Aylea Wilkins. Edited by. If the proceeds from the sale of the vehicle aren't enough to cover the balance of your loan, the remaining portion is called the deficiency balance.
In most states, your lender can sue you to collect this deficiency. However, as discussed above, there are defenses to a deficiency action. The most common defenses are:. You might still be able to get your car back if the lender has not sold it yet.
Below, we discuss some of the options available to you for getting your car back. Redeeming essentially means buying back the vehicle.
You can generally redeem your car if you pay the lender your entire loan balance, including all arrears and repossession costs. But most people usually don't have the money required to redeem a car. Some states allow you to reinstate your loan and get the car back if you can cure all of your arrears and pay for the repossession costs. After you reinstate, you must continue to make regular payments on the loan. Learn more about the difference between redemption and reinstatement. If your lender sells the car at an auction, you can bid on the vehicle to try to buy it back.
But even if you buy back the car, you'll still remain liable for any resulting deficiency balance. If you file for bankruptcy prior to the sale, the automatic stay will prohibit the lender from selling the car without obtaining court permission. Depending on the type of bankruptcy you file, this can buy you more time to gather the necessary money to get your car back or allow you to cure your arrears through the bankruptcy.
Read more about how to get your car back after repossession. If you're behind on your loan payments, the best thing to do is to communicate with your lender. Your lender might be able to offer you a solution such as a reduction in payment amount or interest rate that can help you catch up on your payments and avoid repossession. Learn more about options to avoid a car repossession.
The information provided on this site is not legal advice, does not constitute a lawyer referral service, and no attorney-client or confidential relationship is or will be formed by use of the site. The attorney listings on this site are paid attorney advertising.
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