If you don't pay your car payment, your creditor might repossess your car, in addition to adding late fees and interest to the outstanding amount on your loan. Contact your creditor before you miss a payment, to discuss the situation and options.
Repossession
Most state laws allow your creditor to seize your vehicle, even on private property, without notice if the auto loan is in default. Your contract should state the determining factors of default. Missing between one and three payments typically amounts to default.
Sale
After repossessing your vehicle, your creditor can sell it. State law may require your creditor to notify you of the date and time of the sale.
Personal Property
You will be allowed to retrieve any personal property left in the car. Your creditor can't legally sell your personal property.
Deficiency
The difference between the amount your creditor gets for the vehicle and the amount you owe on the contract--plus late fees, interest and any expenses detailed in the contract--is the deficiency. If you owe $5,000 and the car sells for $3,000, the deficiency is $2,000 plus any fees owed under the contract. Most states let creditors sue for the deficiency.
Reinstatement
Some states allow you to reinstate your loan by paying the past-due amount in full before the auction date.
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