Repossession is scary, and finding accurate information isn’t always the easiest. In today’s article, we are going to reference and paraphrase some of the tips on how to keep your car from repossession in the NCL Consumer Debt advice series. By the end of today’s article, we hope that you feel more equipped to handle this not-so-fun situation.
How Repossession Happens
When you buy a car on credit, you almost always end up putting the car up as collateral for the loan. From time to time, a consumer will also use their car as the collateral for an unrelated small loan. These are called auto pawn loans or high-cost auto title loans.
If you get behind on payments or violate the terms of your agreement, you put yourself at risk of repossession. Even one or two missed car payments can put you in serious danger.
If this applies to you, keep reading. Here are some tips on how to keep your car from repossession.
1. Keep Your Payments Current
Your car payments should be a priority over other monthly bills. When deciding between, credit card debts, electrical bills or your car payment, remember what you have to lose. If you miss only a few payments for your car, you are at risk.
2. Keep the Damage Insurance Current Too
If you miss your insurance payments your creditor might replace your insurance with a much more expensive option. This will increase your monthly car payments.
3. Figure Out What Add-Ons You Don’t Need and Cancel Them
When you first purchased your car, you may have added unneeded insurance products. Some of them are worth paying for, but it’s unlikely you need them all. Find the add-ons that are unnecessary and cancel them with your insurance dealer.
4. Do a Bit Of Negotiation With the Creditor
Your creditor might allow you to postpone your payment. Try to make an agreement. If you succeed, make sure you have it in writing to avoid any disputes.
5. Figure Out If You Can Cure the Default
Some states grant their citizens a right to a cure. In other words, you may be able to pay for your late payments before repossession. If you do get a second chance, make sure you pay the late payments before the due date.
6. If all else fails, sell the car.
Sometimes you might be out of options, and the only thing you can do is sell your car. This option is better than repossession because you’ll be able to sell your car at a higher price. You also avoid a number of additional fees.
We know that facing a potential repossession feels scary. You may not know what to do and may feel ill-equipped to negotiate your way out of the situation. These tips on how to keep your car from repossession will allow you to breath easy. However, if you feel anxious or insecure about your ability to keep your car from repossession and avoid the Repo Man, today!