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What is a Car Repossession?

By Garry Crystal
Updated Jan 22, 2024
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Car repossession is a situation in which a creditor reclaims a car from a buyer who's fallen behind on his or her car payments. Though laws vary regionally, creditors can often repossess cars without warning the buyer first. There are sometimes alternatives to this process, but it largely depends on the situation. If the creditor and buyer are unable to work out an alternative and the repossession is reported to a credit agency, it can be extremely damaging to the buyer's credit score.

When and Where Cars Can Be Repossessed

When a buyer purchases or leases a car on a payment installment plan, the vehicle is not legally his until he makes all the payments. If he misses payments or defaults, then the creditor can repossess the car at any time. A creditor or car repossession crew cannot threaten the buyer, but they can follow him around as he uses the car and take the car whenever he gets out of it, even if it's only parked for a few minutes. Some cars come with an electronic disabling device pre-installed, which makes them unable to start if the buyer misses a payment. Car buying contracts sometimes offer a grace or warning period, which allows the buyer to be delinquent on payments for a specific number of days, but there may be a penalty fee for late payments.

A repossession crew can take the car from just about anywhere, including a private property like a driveway, or public property like the street or a parking lot. Many laws allow them to trespass onto the buyer's property but not to take the vehicle from an enclosed facility, such as a garage or barn. If the buyer tries to hide the vehicle or damages it before the crew can take it, however, the credit company can often sue him or refuse to return the car, even if he pays all of the outstanding debt. In some US states, these types of activities are considered felony offenses, and the buyer might have to go to jail. It is also the buyer's responsibility to remove any personal items from the car; aftermarket modifications like stereos or rims often must remain with the car.

Process of Repossession

The main point of a car repossession is for the creditor to regain some of the money loaned, so the entire process is geared towards this end. Once the car is repossessed, the creditor will usually have it cleaned and serviced, and will check to make sure that all the parts and features of the car are in order. The creditor will usually then try to sell or auction the car to make back some of the money owed on it. The amount of money that the car is sold for will be deducted from the amount the buyer owes, but he still has to pay back the balance of the loan as well as repossession fees, which usually includes the cost of a repossession crew and any cleaning or repair bills needed to get the car ready to auction. If the buyer surrenders the car voluntarily, he can often avoid paying some of the fees.

If the creditor is selling the car at a public auction, it usually has to let the buyer know when and where the auction is so that he can buy the car back if he wants to. Buyers can sometimes get their cars back from the creditor before they go to auction if they agree to pay back the entire balance owed as well as any fees, but this often depends on the creditor.

Alternatives to Repossession

A person can sometimes avoid going through this process by negotiating with the creditor. It's generally best for the buyer to call the creditor as soon as he knows that he won't be able to make a payment. Sometimes creditors will be willing to accept a lesser payment or to a defer payment for a short amount of time. They are typically not required to work with the buyer, however, so this often depends on the individual situation.

It's also sometimes possible to avoid a car repossession by declaring bankruptcy. Though laws vary regionally, many statues prohibit creditors from trying to collect debts from a person who is going through this process. This type of statute is called an automatic stay, and goes into effect as soon as the person files for bankruptcy. There are a few situations in which a creditor might be able to work around this though, particularly if there is a "lack of adequate protection" for the creditor in the situation. This means that the creditor's asset — in this case, the car — is at risk while in the possession of the buyer. For instance, if the buyer didn't have insurance on the car, or if he didn't register it, then the creditor might be able to claim a lack of adequate protection and take the car even if the person filed for bankruptcy.

Effects on Credit

A car repossession has a very negative effect on a person's credit rating. In the US, can stay on the person's credit rating for seven years. It's sometimes possible to get it removed earlier, however, especially if the way that the incident is recorded on the report is not completely accurate. In this case, a person may be able to have the information taken off because of inaccuracy in a process called credit repair. Credit reporting laws vary regionally though, so buyers may want to consult a lawyer before trying to repair their credit.

WikiMotors is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.

Discussion Comments

By Kathy32 — On May 14, 2014

Huh! I bought a repossessed car once at an auto auction – never regretted it! Still runs great. It was almost new. So, someone's loss – my gain.

By anon355533 — On Nov 17, 2013

By anon350325 — On Oct 03, 2013

I bought a jet ski and have not made a payment for four years due to losing my job. I paid $7,000 on time every month until I lost my job. I now owe $4,000. I now am working and can afford to pay them but I do not have that large a chunk of money. I could do a $2,000 lump sum, at best.

I know I should have just let the repo man take it. He only made two ro three attempts, but I thought I would get money much sooner. Now it's been so long I'm kind of freaked out about what may happen. Does anyone know what I will be looking at? I know it was stupid, stupid, stupid!

By anon350097 — On Oct 01, 2013

If you lease a car that has a GPS on it and you remove it, can the car lot report the car stolen?

By DarkPenguin — On Sep 25, 2013

Just now I saw somebody's SUV being repossessed in front of my building, and the repo guys were using a full sized auto transporter. Until recently I had only seen these trucks on freeways, loaded with new or nearly new cars for the dealerships, but now I've been seeing them used for auto recovery. And they do this even if they only seem to be collecting one or two vehicles. Why do they do this? The single-vehicle platform trucks are bad enough but the massive engine of a Mack tractor, idling for 30 minutes, is as annoying as hell for the neighbors.

By anon336559 — On May 29, 2013

Read the posts here! Maybe a light will go on. Grown people who have no intentions of living within their means and actually trying to figure out how to hold onto something that they are not paying on anymore, this is the writing on the wall here. Give it back if you cannot pay for it anymore. It's not yours anymore!

Seriously, grow up and give the toy back to teacher, play time is over. Obviously there are always exceptions, but this is not what we are talking about here.

Being responsible isn't for everyone and these posts are a perfect example of that.

By anon327244 — On Mar 27, 2013

What if your yard gets damaged by the repo truck?

By anon275129 — On Jun 16, 2012

My husband went to Drive Time to get a truck and he was in the hospital with kidney stones so his first payment was late but it got paid. The second payment was late but also made and now he was working on the third payment and spoke with a man about trying to get all caught up and the man told him to pay a partial payment that day and pay the rest a few days later and this would keep the repo man from coming.

My husband did exactly what he was told to do, but the next morning, the car was gone. He spoke with all the managers and they told him sorry but you cannot have your car back and that's that. They told my husband that whatever the other guy told them during the week about paying the partial to avoid repossession was a mistake on that guy's part and he should have kept his mouth shut.

O.K. Sad, but O.K. We will figure out what's next. Hubby goes to bank and DT took out the rest of the payment as well, after telling him that the money he paid for the partial payment will be returned. So they have the truck and the payment. I told him to fight to get his truck back and do whatever needs to be done to get things straight. He wants to pay on time and get caught up asap, and hopefully they will give him that chance.

By anon242378 — On Jan 23, 2012

I purchased my truck from a private/friend of a friend and agreed to pay a certain amount. Now this person is harassing me, wanting the truck back because me and the friend are no longer friends.

I have the title in my name with no lien listed and she hand wrote a different amount on the title. I have titled it since solely in my name and it does not list a lien holder. Can I go by the last dated document (title) amount and show proof that I did pay that amount as proof of ownership?

By anon226956 — On Nov 02, 2011

If your vehicle gets repossessed are there any laws stating that they must serve you with paperwork first? My vehicle was repossessed. I was on a payment plan with them and was making the new monthly payments. They asked me to send them some paperwork this month, which I did not turn into them because I was working overtime. They did not tell me if they did not receive the paperwork my vehicle would be repossessed. They were trying to redo the loan. I was told to make my payment on 21st of this month. I actually did make my payment on the 21st and keep my agreement. I took my payment receipt into the bank tonight to show them I made the payment.

They claim they called me on 25th of this month but I never got the phone call and again on 31st of Oct I did get this call. However, I did not get the message from the bank on Oct 31st until I was driving out of a parking lot at 7 p.m. to go home from work. Three hours later, my vehicle was repossessed and I didn't even have a chance to call them back to find out why they called.

The next day, I called them back and told them they needed to give me my vehicle back, that I made the payment. The answer was, "We will give you your vehicle back if you give us $4400." Tell me, do you think they did something wrong because I think they should have given me time to call them back. I could not call back until the next day because the bank was already closed.

By anon223010 — On Oct 17, 2011

My husband's truck was taken by the cops in what they called "commission of a felony." They caught him with 35 pot plants that were growing on federal property in one county then came to our house in another county to search our house for additional evidence.

I declined their search and told them to get a search warrant, which took four hours. They took a truck that was just bought this year with payments for four years yet. They told us that it would cost us 1,400 dollars to try to get it back, but he hasn't been charged yet. We have good credit, but don't want to pay for it and the insurance if we can't get it back! What do I do?

By anon211895 — On Sep 04, 2011

My fiance bought a car in May 2011. His financial situation changed drastically and has yet to make his first payment to Drivetime, only a deposit was made, half in may and half in June. The loan amount is 19k and the blue book at best is 7k. Can he turn in the vehicle at this point and walk away? What can drivetime do to him?

By Sasha Hyder — On Aug 11, 2011

I got my car from a small car lot in seattle, and I make my payments on time. I pay $400 a month and I owe them $1000. My car company called and left me a voice mail saying that if I don't pay $1000 by the end of August, they are going to repo my car.

Now can they repo my car if I am making my payments on time and I only have $1000 left to pay off. I have never failed to make payments. My checks are in on time. But the guy keeps on calling my cell phone and my house phone, harassing me and my family. What can I do?

By anon199257 — On Jul 22, 2011

My story is different. I was making my $400 payments on time. And they had the car more than I did. It stayed in the shop. So I moved back home and the transmission went out four months after I bought the car. I told them to come get it. I'm two hours away and they will not come get it. It's been sitting in my yard for eight months now!

By anon181143 — On May 28, 2011

it is not a felony to not pay your vehicle, only time you can get in trouble is if they get a court order and you are served with it and you refuse to give it up then you can be found guilty of contempt of court. But, as with all things you need to be served first.

By anon145310 — On Jan 23, 2011

I really hate to say it but, some of the questions posted here are idiotic. If you have a vehicle you can't pay for, then surrender it! Get all of your personal junk out of it and tell the finance company to come and get it. If it's your only vehicle then make some other arrangements in advance. Ex: carpool, catch the bus, ride a bike, walk, etc. It sounds to me like a lot of you may have had an intention to pay when you got the vehicle but when times got hard or something else took priority over one of the two main things that should be top priority (mortgage or rent and transportation), the important things took a back seat now you're looking for answers to questions deep down you already know the answers to.

If your car is repossessed, you can make arrangements with the creditor to get your belongings back.

If your car is due to be repossessed, sure you can hide it for as long as you want, but when you least expect it, you might have to find another way home.

Why put yourself in that situation? It could mean court and fines, wage garnishment, or a freeze on your bank accounts.

And, yes, if you are behind on your loan the repo man can creep up in the middle of the night and snatch your car right out of your driveway. It's not stealing. When you signed on that dotted line at the dealership and pulled off the car lot happily in your new ride, you signed a binding agreement that said somewhere in it that if you default on the terms of that agreement by not making your payments the loan company had the right to repo, sale, and come after your for the deficiency amount.

I'm sorry if this not what you want to hear -- it's the truth. And it doesn't matter whose name is on the registration, if the DMV does not have a title in the system listing you as the "sole" owner of the vehicle with no leans on it, then you do not own it and you could get into some serious legal troubles. You can be charged from the loan company with unlawful use of conveyance -- that's like grand theft auto, folks -- because that contract you signed for the loan if legally binding and it pretty much says that until you pay off the vehicle and get the title, it belongs to the finance company. And because it has your signature and personal info on it, it pretty much acknowledges you owe the debt. So you can run if you want to.

By anon135755 — On Dec 20, 2010

My fiance signed over his car to me for $0 about two years ago. We broke up this summer. Since then I've put in a thousand for repairs and moved to a new city, gotten new registration, and a different plate. Now my ex fiance's mom is saying I owe her money for the car because she bought it for her son, signed it over to him, and they had and understanding that he would pay her back. But he gave it to me with no strings attached. We never agreed that I would pay anyone for the car. Can she repossess it or do anything about this?

By anon130862 — On Nov 30, 2010

I am 45 days late today. I told bank that I can pay arrears in full by Friday and they said if I don't give them the amount owed today they will repo my car before I can make the payment Friday. Is that typical or are they being disingenuous?

By anon82722 — On May 07, 2010

What if you owe on a car and you paid it up or you are only one month behind. You tell them you will make that payment that you don't have the money right now to pay. Can they still take the car.

By anon78430 — On Apr 18, 2010

The first posting is ridiculous. If you owe money on you vehicle and cannot pay for it, you should turn it in.

For example: If you lend a friend 10,000 for a motorcycle and he stops paying you for any reason, how would you feel about that?

You would want him to sell the bike and pay you back or give it to you so you can sell it.

Everyone is very happy when they go to the dealer to buy a car and the finance company "in good faith" approves your loan.

Then when you can't pay anymore, is the finance company the bad guy?

That 120,000 ferrari will get repoed sooner or later, no matter what. If you hide they will find you, and if you think you can leave the state they will still find you.

Unless you become a "fugitive" and change your social, name, and birth certificate. You will eventually leave a trail somewhere. Is it worth all of that?

After a while the finance company will go legal and get a warrant for the unit.

If the police get involved and they cannot find you as well, then guess what?

There will be a warrant for your arrest.

Florida law says that if you write a check for over $150.00 it is a felony.

What do you think will happen if you hide a mortgaged vehicle that's worth 10-20-30 grand?

Be aware of the laws. If your intentions are to catch up with your payments that's fine. But if you intend to keep it forver or as long as possible without paying, it just gets worse at the end.

By anon72584 — On Mar 23, 2010

Running from the Repo man is not a felony. I repeat: it is not a felony!

Repossessions are civil matters, not criminal. If a repo guy comes to your house, tell him to leave. He will try to scare you, and he might threaten to call the police. Just laugh in his face, that's a very old trick. The police will only tell the repo man to leave because law enforcement cannot intervene unless there's a breach of peace, that is, violence of any kind during the repo by either party, trespassing, damage to property, etc., or if the repo guy has a writ of Replevin (writ of possession) issued by the court. In that case he doesn't have to call the police because the repo man has to be escorted by a police officer if he is to take your car from your property.

The title of the vehicle may be held by the bank, but the car is registered to your name, and therefore it is not grand theft auto if you hide away. Morally speaking if you can't afford car payments don't buy one. Yet, in real life who cares about morals when in court law is what matters.

If you are behind your payments, hide your car, change your address or do whatever it takes until you catch up with your three, four, five or six monthly payments you are behind. If the repo man tows your car away, it will be more expensive to get it back, plus the embarrassment.

On the other hand, if you are just, well, I don't want to say a crook, but if you are just you, and don't give a damn about anything, you may perfectly well finance a car, make the first payment and go into hiding. But remember this: if you are going to finance a Mercedes, BMW, Ferrari or any expensive car, you better make sure they don't know where you live, because they will follow you and when you least expect it, they will get your car no matter where you are. Your best bet is to move to another state but even there, a family member you don't get along with, or a jealous girlfriend, or somebody who just wants to make your life difficult can rat you out and call the repo man.

But once again it is not a felony. If you don't believe me talk to a lawyer. A lot of people on this site are giving a lot of false information.

I live in Miami, and people here just want to show off and pretend they have what they don't. My brother, for instance, lost his house two years ago, and stopped paying his car about the same time. He drives a US$120,000 car. I'm sure the repo man is after him but they don't know where he lives now. He is very careful to park his car inside the garage (repo man cannot, I repeat cannot break into your property) and not to leave it anywhere in a public place.

A friend told him to paint his car, but that would be really expensive, especially for a Ferrari.

I'll tell you something else: my brother has been pulled over more than once for speeding and absolutely nothing happened -- nothing other than a ticket. The TV show operation repo gets away with a lot of crap such as violence, assault, trespassing, etc. that makes me think it may not be a real show. In real life, that doesn't happen often.

By anon71519 — On Mar 18, 2010

I am 21 years old and originally bought my car under the circumstances that I would receive $400/month child support from one parent. Parent has since quit their job.

I work full time at a minimum wage job in a low-income city. I cannot afford to take care of myself, let alone, pay $250/month for my car but do not want to let it get repossessed.

I briefly considered Chapter 13, however, I cannot afford to file. Desperate for advice.

By anon61205 — On Jan 18, 2010

I leased toyota sienna in 2005 for 36 months period. I setup automatic payment linked to my checking account from day one. In March 2009 the repo man towed the car from my residence. I was surprised. No payments were behind. creditor sold my car without any notification.

By anon43269 — On Aug 27, 2009

Where do I pick up my belongings from my car

that was repossessed?

By anon37338 — On Jul 18, 2009

i did a chapter 13.it has been discharged for 2yrs. i can't make my car payment.what happens to me if they take my car?

By anon37309 — On Jul 18, 2009

Question: How do I get the pink from seller?

I paid for my car 6 months ago and the seller whom I work with, did not use the check to pay off the creditor. I have possession of the car, but no pink or way to get insurance or pay registration. The seller is still making payments, and paying insurance. Soon the car will need annual registration. What a mess!

By anon36973 — On Jul 15, 2009

My friend just voluntarily gave in his harley up after 5 years of concealing it from the finance company. what will happen to him after this?

By mcleod751 — On Apr 28, 2009

I just had my car repoed last night and all of my belongings were in it. Can I get my things back? I have 200 dollars worth of car seats in my car and everything else. Granted *yes* I couldn't make the payment and I understand *why* they took it, I *don't* have a prob with it (they can have it, who cares) I just want my property that's *in it.* How can I get it back?

By anon30740 — On Apr 23, 2009

In 2001 we bought a used 2000 vehicle. I needed it for my job and they were going to pay me a car allowance. Right after that, my husband needed back surgery and was out of work for 6 weeks. I, unfortunately became disabled within the year and had to leave my job. I couldn't continue to pay the finance company and asked them to please come get it. At that time, I became totally disabled and told them I couldn't drive anymore. The judge ruled in my favor in June 2004 as permanently disabled. This was a few years after I had given the car back.

I was notified that it had been auctioned off soon after that. Two months ago I began getting threatening calls from a different debt collector demanding payment for the car. I don't even drive anymore and my husband drives a 92 van. Any advice?

By Luvmycars29 — On Apr 21, 2009

What can you do when a car is purchased by check (no bill of sale) and the owner never pays off the car loan and now the car is being repossessed? Too trusting!!

By anon29877 — On Apr 10, 2009

Yes it is a felony to run from the repo-man. It has happened to my friend. I got a call from a private investigator yesterday and they have a warrant out for his arrest. They have not been able to contact him or able to locate the car to repo and he hasn't contacted them or voluntarily returned the vehicle and it has been 4 months. He told me he doesn't have the car anymore? They are charging him with Grand theft amongst other things and he could get 10 years.

A word of advice, if you can't afford it, give it back.

By anon25227 — On Jan 26, 2009

Re: anon2653- Yes, repossessing can be done on your property legally in all 50 states. If you read your purchase agreement, this is probably noted.

It will also tell you that the car is not your property until it is paid off in full, no matter how little is left on the loan.

Re: anon3320- Depends how far along in the process you are, and what state you live in.

Re: mztazz- If you are behind in your payments, and do not have an amended agreement (in writing) with the finance company, yes they can repo the car unless your state specifically prohibits it. Contact your state Attorney General's office

Re: anon4986- The finance company at this point has probably sold the vehicle. You should only be responsible for the amount of the difference between the amount you owed and the amount they sold the car for.

Example: you owed 18,000 on the car, they repo'd it and sold it for 14,000. You should only be responsible for the remaining 4,000. At least by turning the car in, you avoided the cost of the repo.

re: anon 17970- Yes you're right you will be held responsible for the balance. And yes your wages can be garnished, although the process differs from state to state.

Re: butterfli30- Unfortunately you're right. It is more complicated than turning it in and walking away. What will happen is that your creditor will resell the vehicle, and you will be responsible for the difference between what you owe, and what they sold the vehicle for (see my response to anon4986 above for an example).

Re: anon22333- Unless I'm mistaken, yes that is a felony in all 50 states.

By anon22333 — On Dec 01, 2008

wondering if you are delinquent and using a different address for mail, and not tell the bank: is that a felony for holding property. Intention is to pay but times have been hard.

By butterfli30 — On Oct 24, 2008

I bought a used car in March of 2008, 1996 Nissan Maxima. I think I got a bum deal. I can't afford the car and I want to turn it back in to the bank but I don't know what the ramifications would be, because I'm sure its not as easy as just turning it in and not looking back. Help !

By anon17970 — On Sep 11, 2008

I am considering letting my car be repossesed. I got a bad deal on a car I've had lots of trouble with in 2 years; and I can not afford to fix the car again. I'm really upside down in the loan, was from the start; and I can't even trade it or sell it for what I owe. I think letting them repossess it might be my only recourse. I know they can say I owe them whatever is left on the loan after they sell the car, and I know they can turn that into a collection agency; but can they garnish my wages for the balance owed?

By anon4986 — On Nov 08, 2007

I could not make payments on a car, my attorney told me to return the vehicle. I did, but am being forced to pay off the remainder 18,000.00. Is this legal how can i get out of this I am 65 years old and living on a fixed income

By mztazz — On Oct 11, 2007

I filed chapter 7 approx 2 months ago. I continued making my car payments. The Finance company's lawyers sent the reaffirmation documents for me to sign. I don't have a lawyer to help with negotiations. However I would sign documents if finance company agrees to reduce the balance to the car's market value. Until the Finance comp responds I am covered by the bankruptcy against repossession. The Finance company can present a motion terminating Stay. But can the Finance Company repossessed my car if I am making the monthly payments??

By anon3320 — On Aug 23, 2007

I am in process of filing bankruptcy. Can they repo my truck?

By anon2653 — On Jul 20, 2007

my car was parked in my private driveway and they repossessed it, is this legal?

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