Losing your car to title loan repossession can be scary, but it happens more often than you think. Fortunately, many state regulations allow consumers an opportunity to redeem themselves and get their cars back, but it’s not always the best choice.
Title Loan Repossession Recovery: Key Takeaways:
- Silver Lining: Despite the stress of repossession, reclaiming your car remains a viable possibility.
- Common Cause: The primary reason for repossession is the failure to keep up with loan payments.
- Primary Cause: Failing to make loan payments is the most common reason for car repossession.
- Opportunity for Recovery: In many cases, lenders provide an opportunity to recover your vehicle before it goes to auction.
- Reinstatement Options: Engage with your lender promptly for possible reinstatement or redemption agreements to recover your repossessed vehicle.
- Credit Impact: Defaults on title loans can affect your credit for up to seven years.
Title loans have high-interest rates, and many people underestimate the cost when they experience a financial crisis, doing anything to get the money they need. Before deciding if you should get your car back after car title loan repossession, consider your reinstatement options and local laws.
Title Loan Repossession Laws
Lenders must follow their state’s repossession laws, which vary by state. Some of the factors that vary include:
- Redemption rights – Some states require lenders to allow time to make up your missed payments and cover the cost of repossession. The window is short, typically 21 days or less, depending on the state, and you must pay off the entire loan balance plus fees or other charges to regain possession of your car.
- Loan balance repayment – Your state laws will determine if the lender can sue you for any remaining loan balance – deficiency balance – after they sell the car.
- Surplus money – If the lender sells your car for more than you owe, there is a surplus. State law determines if the lender must return the funds to you.
What Can I Do if My Car Is Repossessed by a Title Loan Company?
Approximately 12 million Americans use title or payday loans annually. Title loan borrowers have an average loan amount of $694 with an average APR of 317%. Unfortunately, one in five borrowers’ cars end up in repossession for not paying the title loan back on time.
If this sounds like you, you’re probably wondering how to get a repo car back, or if my car gets repossessed, can I get it back?
Can You Get Your Car Back After Title Loan Repossession?
Whether you can get your car back depends on your state laws. Some states allow opportunities for redemption, but the window of opportunity varies. The key is to contact your lender immediately to determine if and how to get a repossessed car back.
If you can get your car back, be prepared to come up with the money to repay what you owe, plus the repossession costs.
How To Get Your Car Back After Title Loan Repossession
If your lender allows you to get your car back after defaulting on a car title loan, you must know the steps to take and how to best prepare.
In any situation regarding repossession, communication with the title loan lender is critical, as is reviewing your loan agreement to ensure you understand your options.
Here are some initial steps to take after defaulting on your loan contract.
1. Determine the Reason Your Car Was Repossessed
You already know you’re missing payments, as that’s the number one reason for repossession with title loans. But, evaluate your situation to determine why you missed them.
If you had a single-payment loan and didn’t budget properly, you may have come up short and thought you had more time to get the money.
If you missed monthly payments, you should revisit your budget to allow enough money for the payments or discuss options for a payment plan or refinancing.
Some lenders allow negotiations for a repayment plan, but you must prove you can afford the new payments.
2. Contact the Lender for Reinstatement Options
After determining what you personally can afford, review your loan agreement to determine your options.
This will help streamline the conversation with your lender when you contact them. Understand if you have options for a payment plan or need the funds in one lump sum to get your car back.
After reviewing your loan agreement:
- Contact your lender.
- Be courteous and ask questions.
- Let them know you want to work things out and are willing to find a way to make your overdue loan payments acceptable to them.
3. Determine Where You’ll Get the Funds
After talking with the lender, determine how you’ll get the necessary funds to get current on your auto title loan.
If you need a lump sum of money and don’t have it in your bank account, you may need to borrow money from friends or family or find other ways to get cash fast. The problem with borrowing more money is that you put yourself further into debt, so proceed with caution to avoid further financial turmoil.
If you can’t access the funds in a lump sum and the lender agrees to a written agreement for a payment plan, make sure you can afford the payments to avoid vehicle repossession again.
4. Consider Refinancing Your Title Loan
Some title loan lenders allow you to refinance an existing title loan. If you’re going through repossession because you can’t afford the current payments, consider finding another title loan with loan terms you can afford.
How Soon Can I Get My Repossessed Car Back?
Every lender and state has different policies, but you generally have 10 to 30 days to get your car back. For example, in California the repossession agency must notify you within 48 hours of seizing your car where they took your car. They must also provide you with 15 days notice before selling or disposing your vehicle, and it must be within 60 days of repossessing the vehicle. The notice should tell you how to reinstate your loan and redeem your vehicle, including paying any outstanding amounts.
Again, refer to your loan contract to ensure you understand your rights and have ample time to come up with the money to get your car back.
How long it takes you personally depends on how quickly you can get the money. We don’t recommend that you rush into things. Take your time, revisiting your budget and ensuring you can afford to get your car back, make the payments, and carry proper car insurance.
Should You Get Your Repossessed Car Back?
It’s natural to want to rush to get your repossessed car back, but it’s not always the best solution.
Car title loans are expensive, with high interest rates. If you underestimated the cost of the title loan transaction, you may have been shocked to learn that the title lender would repossess your car.
Before paying the fees for repossessing your car, ensure you can afford the ongoing costs, including the title loan payments if the lender agrees to accept payments versus a lump sum.
However, please note that even if you don’t take your car back, you may still be responsible for any outstanding amounts on the loan, including the money the lender cannot recoup selling the vehicle.
FAQs
What Should You Do During Title Loan Car Repossession?
If you lost your car to repossession, the first priority is to read your contract and contact the lender. Find out your options to get your car back and what it will cost.
Next, you must focus on your finances and if you can come up with the necessary funds in time. Each state law allows different timelines for redemption, so be sure to ask your lender about them.
What Notice Is a Borrower Entitled to Before Repossession?
Every state law differs regarding the notice lenders must provide borrowers before repossession. Some states require longer notice periods than others before repossessing your vehicle. For example, lienholders in Ohio aren’t required to provide advance notice before repossessing a car but must send them notice within five days after repossession. The same is true in California. Lienholders aren’t obligated to provide advanced warning before repossessing a car; however, they must tell you within 60 days of taking the car that you have 15 days to get money to repay the loan to buy the car back.
Final Thoughts
Violating a title loan agreement can lead to vehicle repossession.
It’s not the best feeling to walk out and find your car gone, but it’s a risk you take when working with a title loan company to satisfy a financial emergency.
There is title loan help if you ask for it. The key is to contact your lender before you get too far behind and risk losing your car to repossession.
While state laws may allow you the legal right to redeem your car, getting a car out of repossession is much more expensive than working out a plan with your lender before it gets to that point.
Contact us today if you need more information on secured title loans from a company that allows an entirely online application for cash loans on car titles. If approved, you may receive your cash in as little as 24 hours on business days.
Written by
Samantha Hawrylack
Samantha Hawrylack writes for our company and is an expert in personal finance. Sam received her Bachelors of Science in Finance and her Masters in Business Administration from West Chester University of Pennsylvania. She began her career in the financial services industry and shifted to an entrepreneurial role where she could directly impact clients. Sam has an impressive background in personal finance and business management.