Facing Vehicle Repossession?
An auto loan is secured debt, which changes your options if you fall behind. Here's what actually happens, and how to handle the balance left over.
Overview
An auto loan is secured by the vehicle itself, which means the lender can repossess the car if you fall behind, often after just one or a few missed payments, depending on your state and loan agreement.
If the vehicle has already been repossessed and sold, and the sale doesn't cover your full balance, you may still owe a deficiency balance, which becomes unsecured debt and can often be negotiated similarly to a credit card balance.
This resource center covers your options before repossession happens, what to expect during the process, and how to handle what's left over afterward.
Start Here
New to this situation? These are the first things to read or do.
How This Usually Unfolds
Contact your lender before you fall further behind
Consider voluntary surrender vs. waiting for repossession
Understand your state's redemption rights
Address any deficiency balance afterward
Educational Articles
State-Specific Resources
Laws and rules for this topic vary by state.
See repossession and redemption laws for your stateRelated Videos
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Visit the ReliefGuardian YouTube ChannelFrequently Asked Questions
What's the difference between voluntary surrender and repossession?
Voluntary surrender means returning the vehicle proactively rather than waiting for the lender to repossess it. Both are damaging to credit, but voluntary surrender can sometimes reduce repossession-related fees and looks slightly better in some lenders' eyes.
What is a deficiency balance?
If the lender sells the repossessed vehicle for less than what you owe, you may still be responsible for the remaining unsecured balance, which can often be negotiated similarly to other unsecured debt.
Can I get my car back after repossession?
Some states offer a redemption period allowing you to reclaim the vehicle by paying the full amount owed plus repossession costs. Rules vary significantly by state and loan agreement.