How Late Can You Be on a Car Payment Before Repossession?
How Late Can You Be on a Car Payment? I get it, It can be the worst feeling ever, missing a car payment and you end up deep thinking how Late you would be on a car payment before taking it back
For every time the repo does not come through and you feel relieved but still in the deep thought thinking he or she might show up then the next day, which entirely isn’t a good feeling and not the best way to live your life.
But I have good news for you and that is, you can making the repo person not come again and believe me, it’s simple. The only thing is that, you need to act quick and fast.
When Does Repossession Start
Basically in lots of states, a money lender can start the repossession procedure if you just one day late your payment. In as much as they are not needed to, the majority of money lenders will have to go through the process of getting a previous payment before calling the repo man. They’re actually not the same, I mean the repo man, so also is the law in each state
Depending on the state, each state has its own idea of when a default happens, hence, when a default happens, majority of state permit the lender to be in possession of your car at any time and also on your property and this will be without a notice of any sort, so long as it is a peaceful one.
It is also dependent on your relationship, you see, this is why relationship is important. If perhaps you’re a strong relationship with the lender, you can be given the chance to catch up in a reasonable time.
If you’re known to pay late, that will be bad because the lender will regard you as a risk for default and may decide to act really fast
There Are No Winners With Repossession
How it normally works is that most lenders would choose not to repossess on the notion that it doesn’t pay off for them. Usually, they pay the cost of towing and having it rekeyed in order for it to be sold off at auction.
The lender loses approximately, 7,000 dollars on each car that they repossess.
Added to this also is that they would like to make you remain in your car so that they continue to earn a living and subsequent payment in the future.
One thing should be clear, do not count on the kind heart of a lender, all you need to do is to take action as soon as possible to make sure that it does not occur again.
Here are some of the tips to know anytime you miss a payment or maybe when you know you might miss a payment
Know Your Options
First thing first, before reaching your lender, make sure you know your option as regards what you can afford and what you can be able to make the payment.
Perhaps you’re thinking the lender will work with you to get caught up, but the lender will want to know your financial worth and capacity
So if you can afford the payments, reach out to the lender through phone call and make an arrangement with him immediately and be prepared to make a late payment,.
On the other hand, if you are not capable of making a payment, you can ask for loan deferment which will ultimately push the sum to the ends of the loan term, you may just owe the interest on the missed payment.
And on the other hand, if you decide that you can no longer afford the payment, discuss with the lender a long term solution like refinancing or maybe trading your car for an inexpensive car
Call Your Lender
Never postpone calling your lender. The truth is, they tend to be more open and accommodating when debtors are communicative. Talk to them about your situation and inquire if there is any solution to them if maybe it is a “onetime occurrence”, make them understand how to tackle it if it doesn’t happen in the future.
Make them feel confident that you will repay them and you can only achieve this when you are open and honest with them, by this you have a chance of controlling the situation
What if You’re Too Late
If perhaps you’ve waited for enough to take care of a car payment and the repo man comes around, there still is a chance of saving your car. When your car is been repossessed, it is normally taken to an impound lot. The reason for this to give you another chance of bringing your payment currents and the required fee.
After a specified amount of time, the lender will sell the car at auction. If the car sells for less than the balance of your loan – also accounting for the repossession and auction fees – you will still be liable for the shortfall.
If the car is sold, you will have a repossession on your credit report, which will decimate your credit score and make it very difficult or very expensive to obtain an auto loan or any other type of financing in the future. It will remain on your credit report for seven years.
Your best bet for stopping the repossession nightmare is to contact your lender at the very first sign of trouble. Whatever plan you can work out with your lender is likely to be better than repossession.