Your lender does not have to provide you with advanced notice before it repossesses your vehicle. The terms of repossession are outlined in your loan contract; because you signed the contract when you initiated your loan, you agreed that the lender can seize the vehicle for any reason stated in the contract.
Your Loan Contract
Read your contract to determine reasons your lender can initialize a repossession. For example, your contract might state that payment is due by a certain date each month and if you don't pay, the lender can rightfully seize your vehicle. Lending contracts differ; some offer a grace period for late payments. Some contracts may state lack of insurance as a reason to repossess a vehicle. Most lenders, however, don't seize a vehicle the first day after you miss a payment or the same day as insurance cancellation.
Lender Correspondence
Your lender will try to contact you before it seizes your vehicle, usually by mail and phone. Ignoring phone calls from your lender doesn't protect your vehicle from repossession. If you moved or changed your phone number, your contract likely states that it is your responsibility to notify the lender. Most lenders would rather not repossess your vehicle, so respond to correspondence and discuss your payments options. You lender may have programs in place to help avoid repossession, such as payment deferment or loan modification.
After Repossession
If your vehicle was repossessed while you weren't around, call your lender or local police department to locate it. Police are notified before a repossession takes place. Once you find your vehicle, make an appointment to collect your belongings from the vehicle. Your lender may offer you an opportunity to reinstate your loan if you pay past due payments, late fees and repossession costs. Some lenders require the entire balance of the loan. If you don't pay to retrieve your vehicle, the lender will resell the car. If the car sells for less than your loan payoff amount, your lender will attempt to collect the remaining balance due.
Repossession Rules
While a lender doesn't have to provide you with warning or notice of repossession, the repossession company must abide by state rules when seizing the vehicle. Repossession companies can take a vehicle from private property, but cannot use force or threats to obtain the car, known as "breach of the peace," according to the Federal Trade Commission. If you feel your lender didn't follow proper protocol when seizing your vehicle, contact your attorney general's office.
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