How Many Months Behind Before Car Repossession?

Car Repossession

Car repossession is a problem that we all want to avoid.  It’s the old chicken-egg question – “How can I get to work to earn a paycheck if I don’t have my car?”  Even if you are falling behind on your car payments, there are steps you can take to delay or avoid car repossession.

Depending on your creditor, you can expect your car to be repossessed in as little as three months without a payment.  Some creditors may allow you six months, if you have worked out a payment agreement.  Some companies, such as “Buy Here, Pay Here,” dealers use payment-devices that will cause your engine to cease working with as little as one day late on payment.  You should have the original loan documents for your car – you can scour the fine print to find out exactly how your lender will react to late payments.

How To Avoid Car Repossession

Lenders want to avoid repossession, despite their threats to do so.  Repossession is costly and generally doesn’t recoup as much financial benefit to the lender as leaving the car with you and having you meet the obligations of your loan.  The following are steps you can take if you find yourself behind on your car payment or facing repossession:

1.) Call your lender.  Do not hide.  Especially in this tough economy, lenders may be willing to accept a late payment, waive a late fee, or work out a payment plan for you.  Although it’s hard to do, do not ignore their phone calls.

2.) Consider re-financing your car.  Depending on the age of your car and your credit, you may be able to refinance your car.  Let’s say you have $9000 left on your car loan.  By taking out another 60 month loan, you can lower your payment by spreading it out over a longer time period.  Only use this option if you are sure you can meet the obligations of the new loan.

3.) If you are financially secure otherwise, you may consider paying your car payment on a credit card.  This may allow you a few more months to catch up on bills without losing your method of transportation.

4.) If you find yourself scrambling with debt and are barraged with harassing phone calls, consider the use of a debt consolidation agency.  You may be able to consolidate multiple monthly debt payments, have a lower monthly payment, and make sure that your car is not in danger of being repossessed.

Related posts:

1. How Many Months Can I Go Without Paying Credit Cards?
2. How To Recover A Car Repo?
3. How To Get An Unsecured Debt Consolidation Loans
4. What Is The Best Way To Eliminate Debts And Foreclosures?
5. Can Creditors Take Your Possessions?