How to Finance a Repossessed Vehicle

Once your lender repossesses your vehicle, you may have an opportunity to purchase it back before it is resold privately or at auction. Expect to pay for the loan's payoff amount in addition to late payments and repossession fees. You may face issues when applying to an auto loan provider for another loan, as potential lenders require that all loan accounts be current and not in default. Even though you're behind in payments, you still may obtain a loan approval.

Instructions

Obtain a Loan Approval

1

Call your current lender to obtain the vehicle's total purchase price. You should receive a letter that outlines the costs and options of reclaiming your car. Find out how long you have to pay for and retrieve your vehicle before it is resold.

2

Apply for a loan with any lender you'd like. You may have to seek out a co-signer or use a subprime lender, but try to obtain a loan from a traditional lender on your own first. Visit auto loan provider websites to view rates and options or apply at a bank or credit union in your area.

3

Give your potential lender your vehicle information; have your VIN (vehicle identification number), year, make, model and mileage ready. Fill out a credit application, providing your name, address, Social Security number, date of birth, employment information and income information.

4

Wait for your approval decision, which can take several days. If your loan request is denied, use a co-signer if possible. Find a co-signer who has good to excellent credit and an annual income of over $22,000.

5

Apply to the same lender or a different one with your co-signer. Using a co-signer allows you to take advantage of lower rates, longer terms and lower down payment requirements. Your co-signer can go with you to a lender to provide an application or call on his own to offer information and verify identity.

6

Apply for a loan from a subprime lender if you can't find a co-signer. Locate a subprime lender online or locally. Call a a potential lender if necessary to ask questions before applying, as interest rates can prove as high as 29 percent in some states through a subprime lender.

Paperwork

7

Go over loan approval terms with your lender, whether using a local bank or credit union, online lender, co-signer or subprime lender. Ensure your payment terms are affordable and you can supply a down payment if one is requested.

8

Give your lender any information it requests. You may have obtained an approval, but many lenders require proof of income (your most recent pay stub), proof of address (a recent utility bill) and proof of employment to verify your employment history before your processing your loan check. Fax or email the information if the lender is not in your area.

9

Make changes to your car insurance policy and provide the lender with proof of insurance promptly.Your lender must be listed as the policy's lien holder. Full coverage insurance is a requirement of most lenders, so ask your lender for the amount of coverage you need.

10

Sign your loan contract. If the lender is not local, ensure the paperwork is sent to you by the next day or that the paperwork will be processed within the time frame you have to purchase your vehicle before it is resold. Keep your copies of the loan contract and obtain your check, which should be made out to your original lien holder.

11

Pay your old lien holder provider promptly. Talk with your previous lender to find out where you can offer your check; you may be required to pay the place that is holding your car. Make your payment and retrieve your vehicle.