The right to possess a vehicle remains with the lender until the borrower pays off all the debts against the vehicle. Till then the lender has complete right to repossess the vehicle if the borrower fails to pay the installments on time. Auto Relief Group, an expert in the loan modification industry, explains the auto repossession process. It usually goes like this:

  • The first step a lender takes is to send a mail warning the borrower to make the delayed payments. It does not always happen as there is no such law to send a warning mail before repossessing the vehicle. However, if the contract contains such terms then a mail will be sent.
  • A follow up call will be made to the warning.
  • The borrower then generally requests for grace period to make those delayed payments.
  • If still the payment has not been made, the borrower will once again receive a warning mail from the bank/ lender.
  • After this second warning, the car will be repossessed. It will be taken away from your office, home or where ever it is.
  • After repossession, the lender will send a document stating that the vehicle has been taken and what will be the procedure to get back the vehicle.
  • The borrower has to find ways to make payments. If he does find then he has to pay the delayed fees, repossession fees, towing charges, impound charges, storage fees and various other fees incurred by the company that repossessed the car.
  • If there is no way where borrower can pay the fees, then he loses the car completely. The lender then will have complete right over the vehicle and will search for a new buyer.
  • The borrower’s credit card report will be updated on account of the repossession of vehicle.

This repossession will reflect in the credit card report and its impact will stay for at least seven years. To avoid such situations one must opt for loan modification which can act as a savior during times of financial crisis.

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