Repossession Basics: Missing Car Payments and What to Expect Failure to Keep Up With Missed Auto Loan Bills How this Might Affect your Financial Position We will detail how many missed payments could lead to repossession and what that means for you.car repossession (ad)
Examples Of Missed Payments And Repossession Timeline
Late fee and other costs that are triggered from your first missed payment are the same in most cases, but depending on how much you were late is a factor regarding several points off from your credit score. At this point, few lenders will attempt repossession.
Second Missed Payment: After your first missed payment, you may face extra late fees and further damage to your credit score after the second missed one. Lenders may issue a “Notice to Cure” warning you of consequences.
After the Third Missed Payment – After three missed payments, the probability of repossession significantly increases. From this point, more than a few lenders will commence with the repossession process straightway while others might wait until later based on their aspiring point regulations.
More Than Three Missed Payments: Failure to keep up with the loan can have serious repercussions down the line such as repossession and further credit damage.
Lender Policies Vary
Lenders have different repossession policies:
Grace Periods: Depending on the lender, some may include a grace period of up to between 60 – 90 days before they actually begin repossessing your vehicle.
Some lenders have technologies at their disposal that enable them to remotely disable a car after one late payment, so the more borrowers communicate with their lender the sooner they can figure out a deal.
Communication is Key
Open communication is important when dealing with your lender
If you are at risk to miss a payment, contact your lender and inform them ahead of time to either find out if deferment is an option or to discuss modified payment plans.
Repossessing a car is expensive, and many lenders would rather cut you a break on payments than have to go that far.
Put simply, two or three missed payments in a row can trigger a repossession but communicating well with your lender can prevent this and the sooner you get to dealing with it, the better.
