After repossession, your lender will likely resell the vehicle, but is not required to do so. According to the Federal Trade Commission, a lender who seizes a vehicle may have to notify you of where it intends to resell your vehicle and when. If the bank promises to sell your vehicle during a certain time frame after repossession, you'll find that information stated in your loan contract.
Before the Sale
Before your bank resells the repossessed vehicle, you might have an opportunity to reclaim it. You'll receive a letter from your lender that states the amount due to reclaim the vehicle. You may have to pay your past due amount, including late charges and repossession costs to reclaim ownership. Or, the bank may require that you pay off the entire loan balance and repossession fees. The letter from your lender will state the date and location of the vehicle's intended sale.
Private Sales
If your bank decides to sell the vehicle privately, it will advertise the vehicle for sale. As with most private sales, the time period it takes to find a buyer varies. Similar to dealerships, the bank will list the vehicle for sale online or through classified advertisements and meet with interested buyers. Your bank is likely to ask for retail value for the vehicle, negotiate pricing and complete the sale, which can take time. Then, you'll receive a bill for the amount due on your loan, if any.
Auction Sales
Many banks resell vehicles at auction for wholesale price. While many auction cars sell the same day, an instant sale isn't guaranteed. Your bank will notify you of the date and location of the auction, but it's unlikely you can attend it. Most auctions are not open to the public. If the vehicle isn't sold at auction that day, the bank will attempt to sell it again on the next scheduled auction date. Many auctions are held weekly, but some are held monthly.
After the Sale
If you don't reclaim your vehicle within the specified time period and the car is resold privately or at auction, you'll receive another letter from the bank stating the amount owed on your auto loan. The bank will use the vehicle's sales amount to satisfy your auto loan and pay repossession fees. If the balance due on your loan is less than the vehicle's sales price, you may receive a check for the remaining profit. If you owe more than the vehicle's sales price, you must make arrangements to pay the rest of the loan deficiency to avoid a potential lawsuit.
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