How to Stop an Auto Repo

If you have fallen behind on your car payments the creditor may repossess the vehicle. Many creditors repossess the vehicle after as little as one late payment. The creditor may repossess the vehicle from the home or the registered owner's place of business. Although the creditor may repossess the vehicle, you still have rights as a consumer. It is best to research the repossession laws in your state to ensure that the creditor is following them. If you fear that your vehicle will be repossessed, it is best that you act immediately and contact the creditor and negotiate a payment.

Instructions

1

Contact the bank that financed the vehicle. Consult with a finance specialist regarding refinancing the vehicle's loan. Inquire about other options, such as, doubling payments or adding extra money to the current payment to help you catch up the deficiency.

2

Place the vehicle for sale. Locate a buyer who may be willing to buy the vehicle or take on the payments. Place an advertisement in a local newspaper or online auction to ensure that the ad will gain a lot of exposure. Consider offering an incentive to help sell the vehicle quickly, such as no money down and the buyer can simply assume your monthly payments.

3

Consult with an attorney. Inquire about filing bankruptcy. Review a plan with the bankruptcy court that will prevent the repossession and allow a feasible repayment plan. Ensure that all negotiations and repayment plans are properly documented to ensure your protection.

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How Long After Repossession Does a Creditor Have for Resale?

If you default on a car loan, the bank or other financial lender has the right to repossess the vehicle. In other words, a creditor has the right take back possession of the vehicle and sell it to satisfy all or a portion of the debt. After repossession, a creditor has 90 to 180 days to resell or auction the car. The exact time limit varies by state.

Compulsory Sale

If a debtor has paid 60 percent or more of the cash price of the car at the time of repossession, the car must be sold at auction. This is known as a compulsory sale. Although how soon a creditor has to sell the car at auction varies by state, most states require the compulsory sale occur within 90 to 180 days of repossession.

Right to Redeem Repossessed Vehicle

Once a car has been repossessed, a debtor has a set limit of time where he has the right to redeem the vehicle before the creditor can sell it at auction. Although the amount of time the debtor has to redeem the car varies by state, generally a debtor has a minimum of 10 days. However, a debtor continues to have the right to redeem up until the car is put up for auction or otherwise disposed of.

Redemption

To redeem the repossessed vehicle and prevent resale, auction or disposal of the vehicle, the debtor must become current on the loan and pay all reasonable costs associated with repossessing the vehicle including reasonable attorneys fees, if any.

Creditor's Right to Repossession

Secured creditorshave the right to repossess that vehicle when the debtor defaults on his loan, unless other arrangements are specified in the sale or loan contract. A secured creditor is a creditor whose name appears on the title for the vehicle. Essentially, a secured creditor for a car is what a bank or mortgage lender is with respect to a house and the creditors right to foreclose for nonpayment.

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Car Refinance Information

Refinancing an auto loan is often overlooked as a way to reduce monthly bills. Since a car is usually a consumer's second-largest purchase next to his home, refinancing to a lower interest rate can result in substantial savings over time. To obtain the best rate available, it is best to get quotes from several different lenders.

Need

Auto refinancing should be considered by anyone who has a high interest rate, especially in the 21 percent to 25 percent annual percentage rate (APR) range. It is also important for those who have low credit scores to attempt to refinance, which can often be accomplished despite the belief that there are no lenders that will accommodate them.

Doing the Homework

It is quite possible that your credit has improved since you took out the original car loan, or that the lender did not offer the best interest rate for which you were qualified. It is important to obtain a current credit report and clear up any inaccuracies that may appear. For access to credit information, see Resources.

Preparation

To be considered for refinancing, you will need to have a principle of at least $7,500 in order for the loan to be cost-effective for the lender. You will need to provide the new lender with accurate, up-to-date information about your current loan, and about your vehicle, such as mileage and vehicle-identification number.

Process

Refinancing an auto works much the same as refinancing a home. Consumers seek out lenders who offer interest rates lower than their current loan, then complete an application process. Once the loan is approved, the new lender will pay off the existing loan and set up the borrower with a new payment schedule.

Example

By refinancing a $16,500 car loan borrowed at a 21 percent interest over a period of five years, the payment can be reduced by more than $100 per month with a new interest rate of 7 percent. This can result in a savings of nearly $7,000 over the life of the loan. The earlier a loan is refinanced, the more the potential savings, since more of the payment goes toward interest in the beginning.

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How to Refinance a Classic Car

If you have a classic car that you are paying on, you may be able to free up some money by refinancing that car loan. Refinancing your car loan will usually lower your monthly car payments as well as save you interest costs over the life of the loan. Typically, refinancing provides the most benefits if you are only a couple of years into your loan and your credit has improved since getting the loan.

Instructions

1

Contact the current lender to get the pay off amount of the car loan, the interest rate and to ask if there is a penalty for paying the loan off early. Typically there is not a penalty for doing so, but ask to be certain.

2

Get rate quotes from some specialty lenders, such as Motor Cars Financial, JJ Best Banc & Co. and Woodside Credit (see Resources). Banks typically do not offer loans for classic cars, which means you must use a lender that specializes in classic or collector cars. After you get the quotes, you can review them to see which lender is offering you the best refinancing rate.

3

Complete an application with the lender you have decided to go with. For the application, you typically need the year of the car, make of the car, model of the car, car VIN, car mileage reading, engine size, transmission, your employment information, loan term requested, current loan pay off amount and current lender. As part of the loan, there will be a fee to transfer the lien, which usually ranges between $15 and $25.

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How Much to Budget for a Car Payment?

For people who are in the market to purchase a vehicle, thoughts concerning the actual amount the car will take out of the monthly budget are likely to come up. While there isn't a set amount of money that will be sufficient for this, there are some guidelines you can follow to ensure that the actual cost of owning a vehicle won't completely wreck your budget.

Financing

When you are purchasing a vehicle, the amount you will have to budget for that vehicle can fluctuate according to your credit score because the interest rate you pay on your car loan is affected by your credit rating. According to DriversEd.com, a person with a good credit rating can expect to pay around 4 percent in interest, while a person with bad credit can expect to pay around 21 percent in interest. It goes on to state that an applicant with bad credit would pay $464 as the monthly payment on a $15,000 car and a person with good credit would pay $339. That being said, when you start to prepare your budget for a vehicle purchase, consider taking the time to improve your credit score, if needed, so you can get the most for your money. Your credit score also may determine the down payment you will have to put down to finance your vehicle. According to MorningCall.com, the total of all your car payments should be no more than 15 percent of monthly take-home pay. If you don't have good credit, you may have to pay cash for your vehicle. You can save the money by placing the amount you would make for a car payment into a savings account. The advantage to this method is that you can often get a discount by paying cash for a car.

Immediate Costs

With the exception of buyers who are able to get sales tax, licensing fees and registration costs financed, you will have to ensure that you have money available to pay these items when you drive your car off the lot. In some states, such as Arkansas, you will receive drive-off tags that give you 30 days to register your vehicle. Even if you live in a state that does this, you should be realistic about your ability to come up with the funds within the allotted time. Many states have severe penalties for not tagging a car within the specified time.

Long-Term Costs

Your car-payment budget should also include other expenses. Include insurance costs, which will be higher for more expensive vehicles, younger drivers and people with less than stellar driving records. Include maintenance costs, such as regular oil changes, tire rotation and balancing, and windshield wiper changes. Money Under 30 suggests paying yourself a car-maintenance premium every month and placing the funds into a high-yield savings account so the money gains interest and you have the peace of mind knowing that you can pay for maintenance on your vehicle.

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How to Borrow on a Car Title

Borrowing on a car title is a short-term loan option for those holding a clear title to a vehicle. Loan amounts depend on the fair market value of the vehicle, with a loan period of usually no more than 30 days. During this time lender places a lien on the car, giving them the right to repossess the vehicle in case of default. While there is much debate regarding lender practices and risk factors involved with this type of loan, they can provide an option to those who may not qualify for a loan in any other way.

Instructions

1

Get information. Check to see if your state allows car title lending (See Resources). Not all states allow for these types of loans, while others allow them, but with limitations. Know the laws in your state regarding allowable fees, interest rates and repayment periods before making the decision to apply for a car title loan.

2

Get a fair market estimate for your vehicle. Get an idea of what your vehicle is worth by getting an appraisal in writing from a car dealership. Take the written appraisal with you to your appointment.

3

Investigate individual agencies. Comparison shop, just as you would for any other type of loan. Get answers to questions, such as vehicle appraisal criteria and methods, interest rate, additional fees, loan amounts and payment options. If possible, arrange for the lender to appraise the vehicle before filling out any paperwork.

4

Choose a lender and gather required documentation. If the lender has a website, you may be able to download the application form and fill it out before scheduling an appointment. In addition to the application form and clear vehicle title, information typically required includes an extra set of keys, proof of insurance in an amount acceptable to the lender, proof of income, proof of residence and personal references. Once you have this information, schedule an appointment.

5

Go over all loan paperwork, sign and add the lender as a lien holder to your vehicle title. Read the contract and any additional clauses carefully before signing. Most lenders will make your loan check available immediately or within 24 hours.

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Arizona Statute of Limitations on Auto Loans

Arizona restricts the number of years creditors have to collect unpaid auto loans. Such restrictions are mandated to protect debtors from worrying about old debt. According to Arizona debt collection laws, creditors must start the clock ticking on debt as soon as a payment is received.

Identification

Arizona allows creditors to collect unpaid auto loans up to six years from the last date of activity on the loan. Compared with other states, Arizona's statute of limitations is neither the longest nor shortest in the country. As of May 2011, Washington D.C. and 15 states mandate shorter statutes of limitations. The remaining states are either equal to or exceed Arizona's statute of limitations.

Enforcement of Auto Loans

A creditor seeking a civil judgment for an unpaid auto loan must file a lawsuit in a state court. The creditor must provide an original written contract and show proof of payment to establish a breach of contract took place. State courts only enforce auto loan contracts that are valid, meaning the last date of payment must have occurred no later than six years before.

Considerations

Months before the statute of limitations runs out on a written contract, creditors may contact you demanding immediate payment of the delinquent amount. Because creditors seeking a civil judgment against a debtor must file in the debtor's home state, creditors are prone to settle debt or agree to installment payments to avoid involving the court system. Demand written notification of the terms and conditions of any arrangement to which you agree.

Consequences

Failing to repay an auto loan hurts your consumer credit score. Under the Fair Credit Reporting Act, creditors and lenders are allowed to report payment history to the three major credit bureaus --- TransUnion, Experian and Equifax --- for up to seven years. Judgments can be reported for five years. Arizona allows judgments to be renewed indefinitely.

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