If you aren't paying your auto loan provider, expect your lender to repossess your car. Once your vehicle is seized by your lender, you may pay to get it back or allow your lender to sell it. If the lender's sale amount does not warrant enough money to satisfy your loan amount, you must pay the balance due. If you still do not pay, your lender may sue you.
Defaulted Car Payments
If you miss a car payment, your auto loan provider will try to contact you by mail and phone. If you do not respond to its correspondence, expect your lender to contact you at your place of employment or to contact any references you offered at the time you initiated your loan. Read your loan contract over to find out when your lender can start the repossession process. Although most contracts state that repossession is possible after you miss just one payment, many lenders do not start the repossession process immediately. Call your lender to discuss payment options; it may offer help so that you become current on your car loan.
Repossession Process
If you fail to discuss your loan with your lender or to make arrangements to pay past-due payments, expect the lender to start the repossession process. If you do not make arrangements to return your car, known as a voluntary repossession, your lender will hire a repossession company to seize your vehicle. The repossession company can take your car from just about anywhere, including a parking lot, your place of employment, a friend's house or your driveway. Avoid the potential embarrassment and inconvenience of an involuntary repossession by arranging for alternative transportation and bringing the car back yourself.
After Repossession
After your vehicle is repossessed, your lender will send you notice of its intent to sell your car and the amount due if you want your car back. You can pay your past due amount and the lender's repossession fees or the vehicle's total loan balance depending on your lender's requirements. If you do not pay to get your vehicle back, your lender will sell it either privately or at an auction. Once the vehicle sells, you'll receive notice of its selling price and the amount you owe for the lender's loss, or remainder or your loan balance. Call to make arrangements to satisfy the loan's balance and to avoid further consequences.
Affects on Credit
Your lender will still try to contact you to make payment arrangements for your past-due loan amount after your car sells. If you do not pay or contact your lender, it will start to pursue its other collection options. At some point, you can expect your lender to sue you for non-payment, even if it's over a year later. If your lender wins the court case, it can pursue a judgment and garnishee your wages.
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