If you’ve fallen behind on your car payments you’re at risk of getting your car repossessed.
But there are some car repo “loopholes” – i.e., ways to avoid getting your car repoed.
Some of them will work for you. Some of them may work but are only temporary solutions.
Either way, the goal is to protect your car.
Let’s take a look.
Car Repo Loopholes
#1 Parked away in a garage
Your house (or the house the car is located in) is private property.
So the repo man would require a court order to access your garage.
They could potentially get one. But it would take time – time you can use to catch up on your payments.
This isn’t a long-term solution, but it buys you some time.
How much time? It’s hard to say, but generally weeks.
#2 Pay-as-you-go financing / get a new loan
If you’re upside down on your car loan (meaning you owe more than the car is worth), then this won’t work for you.
But if you’re current on your payments, paying as you go can stop a repo.
With this type of financing, the lender doesn’t have the right to repossess the car. They can only seize the vehicle if you default on the terms of your contract.
The key is to get your financing in order.
If your current loan is in default, can you get another one to pay off the old one?
#3 Sell the car
If you can’t keep up with the payments, then selling the car is an option.
You can sell it privately or through a dealer.
If you sell it for less than what you owe, you’ll have to pay the difference, which you might be able to get by going to a local credit union.
But at least you won’t lose your car.
And if you sell it for more than what you owe, then you’ll have some extra money to put toward a new car.
The bottom line is that there are ways to avoid getting your car repossessed. But you need to act fast. The sooner you take action, the better off you’ll be.
#4 Make your payments
This is obvious, but someone faces a car repo needs to get the money from somewhere.
Either from your savings, your income, or from new borrowed money.
#5 Talk to your lender
It’s tempting to hunker down and go cold on your lender.
But your lender may be willing to negotiate. After all, they just want to get their money.
Instead of getting $0, they might be happy to get something.
For example, in the credit card world, when someone defaults on them, a debt collector often buys the debt from the credit card company for just 5-10 cents on the dollar.
In other words, for every $10,000 defaulted on, they might buy it for $500-$1,000 and pull their levers (letters, phone calls, legal action) to try to get the rest.
If someone is looking to make due with a credit card company, if they can offer $1,500-$2,000 for every $10,000, they might be able to strike a deal.
It requires a lot of time and administrative work, but it can be done.
In the world of car repo, you need to know the resale value of your car in order to know the math your lender is facing.
If possible, you might be able to strike a deal that extends your payment terms or even saves you money.
#6 Get a Co-Signer
If you can get a co-signer, and they happen to be up-to-date on their payments the car cannot be repossessed.
This is nonetheless rare.
#7 Know your legal options
Knowing your rights as a consumer can save your car from being repossessed.
In some cases, the lender may not have the right to repo your car.
What makes a Repossession Illegal?
FAQs – Car Repo Loopholes
What are some signs that your car is about to be repossessed?
There are a few signs that indicate your car is in danger of being repossessed:
- You’re behind on your payments.
- Your lender has sent you a notice of default.
- The lender has hired a repo company to recover the vehicle.
What are some ways to avoid getting your car repossessed?
There are a few ways to avoid having your car repossessed:
- Make your payments on time.
- Talk to your lender and try to negotiate.
- Know your legal rights as a consumer.
Can the repo man come into my driveway?
In most cases, the repo man cannot enter onto private property to repo your car. They would need a court order to do so.
They will be able to go into your driveway, but not your garage, for example.
Can the repo man take my car if it’s not in my name?
No, the repo man can’t take your car if it’s not in your name. However, they may be able to sell it if you’re the co-signer on the loan.
What happens if I can’t find my car after it’s been repossessed?
If you can’t find your car after it’s been repossessed, you should contact the lender and try to work out a deal.
In some cases, the lender may be willing to sell you the car back for a higher price.
What are some other ways to avoid getting your car repossessed?
There are a few other ways to avoid having your car repossessed:
- Sell the car yourself and pay off the loan.
- Get a co-signer on the loan.
- Refinance the loan.
What is a voluntary repo?
A voluntary repo is when you give your car back to the lender before they repossess it. This is often done as a way to negotiate with the lender and try to get a better deal.
It’s important to note that you may still owe money after a voluntary repo.
Can I file for bankruptcy to stop my car from being repossessed?
Filing for bankruptcy can stop your car from being repossessed in some cases.
However, it’s important to note that this will not get rid of your debt.
You’ll still owe the money, and the lender may eventually be able to repo your car.
How Do I Get My Repossessed Car Back?
Summary – Car Repo Loopholes
When it comes to falling behind on your car payments, there are a few things that you can do in order to avoid having your car repossessed.
One option is to try and negotiate with your lender in order to come up with a new payment plan. Another solution is to sell the car in order to pay off the loan.
Finally, you can also try and get a co-signer on the loan in order to avoid defaulting on the payments.
Whatever route you decide to take, it is important that you act quickly in order to increase your chances of success.