Car repossession is a serious issue, and if you’ve had your vehicle repossessed, you’re likely wondering about the financial aftermath and whether there’s any way to recover your car or its value. Even after your car is taken, your financial obligations related to the vehicle may not be over. Here’s what you need to understand about repossession fees, deficiency balances, and the possibility of getting back on track.
Understanding Repossession Costs
When your lender repossesses your car, they typically incur costs for picking it up and storing it. These repossession fees are usually passed on to you, the borrower. While lenders are entitled to recoup these costs, they must be “reasonable.” What is considered reasonable can be subjective and may be determined by courts based on factors like the type of vehicle and the repossession process itself. Always request a detailed list of all repossession costs from your lender to ensure transparency and accuracy.
Deficiency Balances and Potential Surplus After Car Repossession
After repossession, the lender will usually sell your car to recoup the outstanding loan amount. If the sale price doesn’t cover the remaining loan balance plus the repossession expenses, you will be responsible for paying the “deficiency balance.” This is the difference between what you owed and what the car sold for, plus any repossession fees. For instance, if you owed $10,000 and the car sold for $7,500, you might owe $2,500 plus repossession costs. Failure to pay this deficiency can lead to debt collectors pursuing you.
Conversely, if your car sells for more than what you owe, including fees, you are legally entitled to the surplus. Lenders are obligated to sell the vehicle in a “commercially reasonable manner.” If you believe the sale price was unreasonably low, it’s advisable to consult with an attorney to understand your rights and options.
In conclusion, while physically getting your exact car back after repossession might be complicated and depend on specific state laws and your lender’s policies (which were not detailed in the original article), understanding the financial implications is crucial. You might be able to “get back” some financial value if the car sells for a surplus, or you need to be prepared to manage a deficiency balance. Knowing your rights and responsibilities is the first step in navigating the complexities of car repossession. For detailed information on your rights, you can contact your state attorney general or a consumer protection office, or seek advice from a legal professional.
