Car Repossession: A Couple Facts You Should Know
Posted on: 26 May 2015
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If you have fallen behind on your car payments and are facing the real possibility that your vehicle will be repossessed in the near future, there are a few facts that you should know. Taking the time to review these facts outlined below can help you to avoid unnecessary costs and possibly even avoid a repossession all together.
You Have The Right To Sell Your Vehicle
If your vehicle is repossessed (through a company such as Tri City Towing And Recovery) and the necessary fees are not paid in order to regain possession of the vehicle before it goes to auction, you will be responsible for paying any outstanding debt on the vehicle once it has been sold. Since the financing company knows that you are already on the hook for the total value of your loan, selling the vehicle for the full value of this loan truly is not a priority for them. This is why it is often better to try and sell the vehicle yourself before allowing it to be repossessed.
When choosing to sell the vehicle yourself, you will be able to control the asking price of the vehicle. This means that you will be able to try and sell the vehicle for the full amount that is still owed on the loan and avoid any negative impact to your credit.
In the event that you are able to sell the vehicle for more than is owed on your outstanding loan, you may even be able to recoup a portion of your investment in the vehicle.
You May Be Able To Rewrite Your Loan
Most financing companies will be willing to work with you in order to try and prevent repossession. After all, the process of repossessing and selling your vehicle can be both time consuming and expensive for the company. Consequently, your financing company may be willing to rewrite or modify your current loan agreement in order to help you bring your account into a current status.
In order to qualify for a loan modification, you will typically need to supply the company with a reason that you fell behind on your payments in the first place, such as the loss of your primary income. You will also need to demonstrate that this issue has been resolved and that you can reasonably expect to be able to make future payments on time.
When modifying your loan, you will no longer be responsible for paying your past due amount in order to avoid repossession. However, it is important to note that this amount will be added to the end of your loan period. This can result in a higher overall interest rate.