What to Do if You Can’t Pay Your Car Note: Stop Car Repossession

Stop Car Repossession

Don’t let the repo man show up for your car.

Not Paying Your Car Note Leads to Ugliness

I just got a visit from the repo man last night. Not a pretty scene. My neighbor is apparently behind on his car payments and his lender has had enough. They’ve called on the dogs, who are using any means necessary to get the car. Including accusing me of hiding his car at 11pm. Repo men tactics are classy, aren’t they?

Anyway, repossession is just a mess. You don’t want your neighbors knowing about your bad debt issues, do you? And you definitely don’t want your credit score to be damaged. A late payment can affect you by as much as 100 points. And a repossession can ding you even worse. Here’s what to do when you fall behind on your car payments and how to avoid the dreaded repossession.

Three Ways to Stop Car Repossession

Call Your Lender – Get on the phone with the company that lent you the money for the car and talk to them about your situation. They should be open to working with you and keeping your business. They don’t want a charge-off. They want a paying customer. They may be able to work with you and give you more time to make your payment. As soon as you make the payment, get a letter and / or receipt showing you are all paid up. This will be good ammo if the repo guy comes around again.

Consider a Refinance – If you’re past that point, consider asking your lender about a refinance. Yes, you can refinance a car loan. By extending the term, you could potentially lower your payment to something you can afford each month.

Sell the Car – Another option would be to sell the car and completely pay off the car loan. I like this solution the best. Because if you can’t afford something, then you shouldn’t have it. Just get rid of it. Get the creditor off your back and never have to worry about a payment again. This is a no-brainer if you are a two car family.

Your last option is just to keep running from the repo man and ruining your credit. You don’t want that. It will eventually catch up to you, or at least your ticked off neighbors will.

Have you ever had to deal with a friend or family members repossession?



Last Edited: May 13, 2013 @ 1:11 pm
About Philip Taylor

Philip Taylor, aka "PT", is a husband and father of two. He created PT Money back in 2007 to share his thoughts on money and to meet others passionate about managing their finances. All the content on this blog is original, and created or edited by PT. Read more about Philip Taylor, and be sure to connect with him on Twitter, Facebook, or view the Philip Taylor+ Google profile.

Comments

  1. The “Sell the car” option is good, but what do you do when you’re upside down on the loan?
    If you sell the car for its value and you’re still a few thousand short of the loan amount, what are some of the options?
    Thanks
    Mark

  2. @Mark – If you had “GAP” insurance it would cover the difference. If you don’t, then you are just going to have to bite the bullet and either pay the difference or take our another unsecured loan to cover the difference. Maybe borrow from a friend or family member? Maybe use a credit card? If you are going to need another car, consider rolling the difference into a new car loan?

    Here’s some nice advice from Liz: http://articles.moneycentral.msn.com/SavingandDebt/SaveonaCar/HowToSellaCarYouDontOwn.aspx

    • skydiverco says:

       @Mark Hello Mark. I just read  your post. I read that GAP won’t cover the difference when are car is repossessed, auctioned and then I would have to pay the difference. I see your post days GAP can cover it. So, I’m confused. I write because I had a lot before the economy affected my business. I tried to pay for the car, but am so far behind. I may be able to sell it and pay the difference, but then I had the idea I may not make it in time. So, just wondering about the GAP. I will of course check with my GAP company. Dan

  3. Mrs. PT says:

    These turds were about to have Momma Bear wrath unleashed on them…they are so lucky they didn’t wake our sleeping baby.

    People — pay your stinking bills!!

  4. Hell hath no fury like a pissed off mama.

    Actually, I think I remember from law school that in some states, Repo men can’t disturb the general public, so if you did say something they would have had to leave (possibly helping your neighbor).

  5. I just like the scare tactic. I would of love for this guy to come to my house flashing a gun or an attitude. First of all, lets take a step back and analys why this repossesion may happen. Guy or girl walks into a dealer, guy or girl has poor credit to begin with, the dealer will sell them the car, although it is knowned that this person has poor payment liability an very low credit scores. The interest rate charged is at around 15 or 20 % , adding all the other crap that the dealer will unnesassarly add,in addition to that ,they will add more crap , which will increase thier commission ( Gap,bumper to bumper coverage,etc.) A 6995.00 used car is now 20,965.00. Monthly payment are 279.00 and it is for 5 years. Now tell me, if the person has no other alternative and is desperatetly in need of a car for transpotation, will the person sign the contract ?. The answer is yes. That is why they find themselves in the repossesion sitution. Dealer should have some type of sense that the person will not meet thier obligations, and should be accounted for that decision. I am sorry, but if anyone walks into a bank for a loan and has poor credit scores and is a liability , the bank will show them out the door. Why would anyone give anyone a car knowing that that person will at some time default in thier loan. In addition to that, they jack up the price so that they will default at any given time. I believe that is the works of a crook. Let them repossese the car. It takes around 4 months before they send someone to repossese the car and you might get some that will even apolygized to you. Take the lost. Many tycoons do the same, they take the lost of a failed business. Credits score are just a tactic to keep you suppressed to payment. This country needs cash payment and not more credit. So what if you lose several points on your credit score. You are probably in the low 300 to begin with and any lower is not going to make a difference.

  6. You can also file chapter 13 bankruptcy to stop the repo on your own without an attorney.  
    http://www.docstowork.com/Chapter13EGuide.html