Can a Car Be Repossessed After Late Payments?

There are numerous reasons why you might fall behind on car payments; perhaps you lost your job or are just simply behind on all of your bills. When this happens, your finance company might give you various options for how to proceed. However, depending on the company in question and your payment history, the consequences might be more severe.

Identification

A car repossession can occur when the finance company demonstrates that you are not holding up your end of the bargain when it comes to your finance contract. Some companies are more stringent than others when it comes to the point in which they will come and get the car. When your car is repossessed, the finance company then holds the cards in terms of whether or not they will allow you to take possession of it again.

Reasons

According to the Federal Trade Commission, your creditor can take back your car from the first missed payment -- because it is considered a default on your car loan. However, most car companies give you more than one missed payment before they come to get your car. This, of course, depends on your payment history. If you have a history of late payments and you get back on track and then miss another one, the finance company may repossess the car because of your history.

Recourse

If your car is repossessed after a slew of late payments, contact your finance company immediately. Find out what you need to pay to get you car back and work with your account manager to get back on track. Be prepared, however, for the possibility that the finance company may no longer be willing to work with you or may issue exorbitant fees to get your car back after the repossession.

Considerations

When you get into the contract, ask what happens when you fall behind, so you are aware of the consequences in advance. Moreover, when you start to fall behind, alert your finance company as to the reasons, because they might be able to defer a payment or give you a reduced interest rate for a certain period of time to help you catch back up.