How to Avoid an Auto Repo

The repossession of a car can be a traumatic experience, particularly if you depend on your car to get you to work or your kids to school. In many places, having a car is the only way to get around to get groceries and other necessities. Avoiding a repossession can be simple, if you are upfront and honest with your lender. However, if you are completely unable to pay, due to a job loss or other unfortunate circumstance, avoiding repossession becomes more difficult.

Instructions

1

Work on a budget. If you have recently had a catastrophic event that has financially depleted you, you will need to figure out how much you can pay for a car, if anything, and how you are going to make that work.

2

Call your lender before you default. If you have already defaulted, call anyway. Your lender doesn't want your car. It's worth much less now than it was when you bought it. Your lender wants your money. Call them and be honest. Tell them you lost your job or whatever else occurred, but explain that you want to work with them. Tell them what you can pay. Your lender may be able to restructure your loan.

3

Sell your car. If you can sell it for what you owe on it, this might be a valuable option, however, it does leave you without a vehicle. If you live near public transportation or have another car, this might be worth your while. If you can't sell it for what you owe, see if you you can sell it for enough so that you can make up the difference.

4

Give it up. If facing repossession and a horrible credit report, giving up the car voluntarily looks better than if it's taken from you. This will also help you avoid legal fees and other costs from it being repossessed. If you lease your car, you may be able to turn it in without a big penalty.