6 Steps to Get Back on Your Feet After a Car Repossession

Having your car repossessed can leave you feeling helpless. You likely depend on your vehicle to get places like work, school, the grocery store, and appointments. So the situation can be a major inconvenience.

Car repossession happens, even to those who have historically kept up with payments. But there are ways to recover after car repossession and get back on your feet.

What is a Car Repossession?

When you purchase a new vehicle, you take out a loan to pay for part or all of it. You sign an agreement with the lender to get a loan which makes you legally accountable for monthly payments on the vehicle. If you miss a payment, the lender can repossess your car.

It takes time, money, and effort to repossess a car. So, although in Oklahoma, the lender has the right to repossess the vehicle after only 30 days, most lenders won’t proceed with repossession until you miss two or three consecutive payments.

Lenders don’t want to spend a lot of time trying to contact the borrower. They will take action quickly if they don’t hear from you. So, if you miss a payment, contact your lender. 

What are the Steps to Repossess a Car in Oklahoma?

Laws on repossessing a car vary by state. In Oklahoma, a lender can repossess your vehicle any time after a missed payment. The lender doesn’t need to provide prior notification to take possession. They will hire a repossession company to take your car back.

Repossession companies can come onto your property to repossess the car at any time. But they aren’t permitted to cause damage during the process. For example, if the vehicle is parked on the street or in a driveway, they can tow it away. But if it’s secured in a garage, they can’t cause damage and enter the structure to repossess it.

If you suspect your car is about to be repossessed, your instinct may be to lock it in a garage to avoid the process. This tactic will only drag things out and could lead the lender to pursue legal action against you. Although a repossession is challenging to face, trying to hide your car won’t benefit you in the long run, it will only worsen the situation.

The lender will sell the repossessed vehicle at auction to recoup as much of the balance on the outstanding loan as they can. The lender will provide notification of the time and place of the sale.

How Can You Avoid Car Repossession?

The best way to avoid car repossession is to be proactive and talk to your lender before it happens. It’s easier to work with the lender to prevent repossession than to dispute it afterward.

Vehicle repossession is time-consuming, and many lenders will work with you to avoid it. Also, working with your lender allows them to avoid hiring a repo company that will charge towing and daily storage fees.

Lenders will typically provide options for your consideration, including refinancing your loan, deferring payments, or developing a loan option.

6 Steps to Recover After a Car Repossession

But what if you didn’t know any of this and they repossessed your car. What do you do now? Here are six steps to take.

1. Speak to Your Lender

There are situations where a lender doesn’t have the right to repossess your vehicle. Review your loan agreement’s default terms if you think you’re a victim of a wrongful repossession.

Call your lender immediately if you don’t know why they repossessed your car. They can help you sort out the details. Gather your payment records, including amounts, dates, forms of payment, and account information. A phone conversation can help provide a quicker resolution than avoiding the problem.

2. Determine Whether You Can Get Your Car Back

The lender typically allows you to get your car back before they take it to auction if you make outstanding payments or pay the loan in full. If you have a family member or friend willing to give you a personal loan for the balance due, it’s an easier path to getting your car back and get back on the road.

If you can’t pay back the loan in full, many lenders will work with you to reinstate the loan and adjust the payment schedule or monthly payment amount. Your lender may be willing to set up a new payment plan allowing you to catch up on your missed payments.

3. Recover Personal Property

If you can’t get your car back, you’re entitled to recover personal possessions left in it. Your lender must provide reasonable and safe access to retrieve items. Cars typically go to auction within 30 days, so you want to act fast. Car customization, including rims, suspension, and audio equipment, are part of the car and aren’t recoverable.

4. Pay Outstanding Debts

If the lender sells the car at auction, it doesn’t mean you can walk away. You may still owe money. For example, if you owe $13,000 on your car loan and the lender sells it at auction for $9,000, you will need to pay the remaining $4,000. You will also owe money for all missed payments, repossession expenses, towing, and storage fees.

5. Make a Plan

The lender will notify the credit bureaus when they repossess your car due to late payments. The lender can hire a collections agency to recoup outstanding fees. The car repossession and collections will remain on your credit report for up to seven years. To obtain credit in the future, you will need to be proactive in improving your credit. Even if you’ve had bumps in your credit history, it’s never too late to make changes and start rebuilding your credit.

6. Ask for Help

Evaluate your expenses and make cuts. Assess how much you can afford monthly on gas, maintenance, and loan payments if you decide to buy another vehicle.

If you’re having difficulty paying other bills, get financial help. Focus Federal Credit Union offers access to a financial services representative. They will help develop a budget and work with you to rebuild your credit. 

Reach out to organizations that can assist with getting you back on the road. Check local churches and nonprofits for help.

Organizations that may be able to help include:

  • United Way of Central Oklahoma. United Way’s 2-1-1 program provides various support services, including employment information and utility assistance.
  • Cars 4 Heroes Inc. This nonprofit’s mission is to provide free, reliable transportation options to veterans, first responders, and their families.
  • Goodwill Industries of Central Oklahoma. People donate used cars to Goodwill which they resale to people in need. 

Contact Focus Federal for Help

Consistently paying bills and debt will help rebuild your credit. It won’t happen overnight, but you can recover from a car repossession. If you’ve found yourself close to repossession, contact Focus Federal Credit Union in Oklahoma City. One of our representatives would be happy to help talk through your situation and loan options.