Repossession has no upside for you, but you still have some rights, which we shall discuss a little further down. The process of repossession is stressful, embarrassing, and expensive. All the cards seem to be in the hands of the creditor.
It is in your interest to avoid repossession because it adversely affects your credit score and all other aspects of your finances, as outlined below.
The car would cost you more after repossession than it would have cost if you made regular payments. There are two reasons for this. One of them is that car sellers dispose of repossessed vehicles at a discount. The money they obtain from these sales often doesn’t cover what you owe. The dealer will still come after you to pay the balance according to the terms of your agreement. The second reason is that you will have to pay the repossession, towing, and storage costs that the dealer incurs in the process.
You should know that your dealer has the right to repossess your vehicle the moment you default. Many car sellers would prefer not to execute this right because getting their money this way is arduous, uncertain, expensive, and time-consuming. Any additional time you get to pay your installments is entirely at the lender’s discretion.
You can opt for self-repossession if you have no hope of raising the funds you require to pay. Self-repossession will still be included in your credit report but with a note to show you took responsibility. It will also save you the drama, but the dealer will still sell your car at a discount.
Now that you have the whole picture, you might be wondering, ‘what are my repossession rights?’ You still have some.
These rights vary from state to state, but they are typical as follows.
The creditor can’t breach the peace during the repossession
The law restrains the dealership or bank seeking to repossess your vehicle from violating your rights under the ‘breach of peace’ clause. The repossession company can’t trespass on private property to take the vehicle. They, therefore, can’t take the car if you have parked it in a closed garage.
They can’t enter your home unless you invite them, and neither can they touch anyone. Besides this, they can’t threaten you with violence or arrest.
The other way they aren’t allowed to breach the peace is by forcing you to stop on the roadside while driving the vehicle.
They can’t sell any other property in the vehicle during the repossession
The car is the only thing to which the dealer or bank has a right. They, therefore, can’t take any of your private property in the car or in place of the car. The dealer should contact you to pick any other thing they find in the car during repossession. There is usually obligated to keep the property for a month before donating it or throwing it out.
You have to be informed of what happens with your vehicle
Your creditor doesn’t have to sell the car; they can decide to keep it. They ought to inform you whether they sold or kept the car. If they decide to keep the car, they should tell you how much they got from it.
It is always advisable to contact an attorney with experience in consumer law. They would give you a fuller picture of your rights in your jurisdiction.