Avoiding Car Repossession

If you are delinquent on your car payments, you want to avoid having your vehicle repossessed. Car repossession can negatively affect your credit history. It will stay on your credit report for seven years. The effect on your credit score may reduce over time, but still, repossession can prevent you from borrowing in the future. Here are some tips to avoiding having your vehicle repossessed.

  • Make payments. The last thing a lender wants to do is go through the repossession process. It usually ends up costing them more in the end. If a lender sees that there is the slightest chance of getting back at least part of its investment, they usually opt to avoid repossession. That is why simply making a few payments can help you to avoid having your car taken away. If you have missed a few payments, do whatever is possible to make a payment or two. That may buy you some time while you consider other strategies.
  • Work with the lender to restructure the loan. Making a payment or two may give you the time you need to work with your lender to restructure the terms of your loan. You may be able to work out a much lower payment that fits into your budget. In the future, you may get to a point where you could refinance the loan and pay it off even quicker.
  • Apply for deferment. Remember, lenders are in business to make money. They do not want to have to spend money on repossessing your car. In extreme cases, you may want to contact your lender and ask for a deferment. The lender may grant you a month or two, maybe even three, where you do not have to pay. You can use this time to fix your financial situation and get back on track with your payments.
  • Sell the vehicle. If you are in a position where you can do without the vehicle, sell it. Keep in mind that if you owe more than the car’s value, you will not have enough to repay the lender. If you have equity in the vehicle, you will have enough to pay off the balance of the loan once you sell the car. If you do have equity in your vehicle, you should keep in mind that you can always use that vehicle for a car title loan. Embassy Loans has helped numerous customers throughout the years in accessing cash for emergency situations. Learn more to see if you may qualify for a car title loan.