10 Car Repossession Loopholes: Keep Your Ride Safe In 2024

Car Repossessions Are Rising Fast

First things first, car repossession rates have seen a significant increase in recent years. Subprime auto repossessions have risen by 11% since 2020, while prime borrowers' repossession rates have doubled within the same period.

Cox Automotive said that by the end of 2023, 1.5 million cars will have been taken, up from 1.2 million in 2022. At the beginning of the year, the rate was 5.93%. In September, it reached 6.11%, which was the highest level since records began in 1994.

In the USA alone, approximately 2.2 million vehicles are repossessed each year, averaging about 20,000 repossessions per day. In the past couple of years, vehicles like the Ford F-150, Chevy Silverado, Honda Civic and Accord, Toyota Camry and Corolla, Nissan Altima, Honda CR-V as well as Dodge Ram were taken back more often.

1. Talk to the Bank: Agree to Extend Loan Payment Time

Most times it's best to just talk to the bank. They want your money, not the car. That being said, based on the bank you choose, you might be able to ask for more time to pay your car loan.

Creditors often grant extensions after reviewing your credit reports, although the loan amount may decrease slightly while the time frame is extended. Take caution with credit unions, as they may increase the interest rate. Before you go ahead and ask for an extension on your loan, do a little digging into past situations to get a feel for how it might play out with car repossession.

2. Lock the Vehicle in a Private Garage

Securing your car in a locked and private area, such as a garage or enclosed space, presents a potent loophole. By keeping your vehicle out of sight, repo agents won't be able to locate it without a court order, which is challenging and time-consuming to obtain. Remember, the garage should be easily visible to passersby, as the repo agent cannot enter private property forcefully or cause damage. Utilize this tactic as you work towards repaying your auto loans and no longer need to conceal your car.

3. Make Car Payments With Unconventional Currency

To avoid a repossession mark on your credit history, consider utilizing payment methods with longer processing times. For example, crypto payments through a credit union or bank introduce delays as cryptocurrency must be converted into cash.

Related: 3 Easy & Simple Steps to Buying Your Dream Car

4. Sell it or Trade it in

If avoiding the troubles associated with hiding your car appeals to you, consider selling or trading it. When trading, select a smaller or less expensive vehicle to mitigate the balance owed to the repossession agency. Ensure you pay off the remaining balance to prevent legal action. Selling your car through a dealership can be a viable option, as they are more willing to purchase repossessed vehicles. While you may receive a lower price, finding individual buyers can be challenging due to the stigma associated with repossessed cars.

5. Get a New Loan to Pay the Car Off

Debt relief loans can provide a means to pay off past due payments and regain control of your auto loan. Although the loan balance may decrease, you will benefit from a lower interest rate offered by the credit bureau. This enables you to make complete or partial payments towards your outstanding loan, gradually eliminating your debt and ultimately completing your auto loan.

6. Remove the Vehicle GPS Tracking Device

To ensure your car remains hidden, consider removing the GPS tracker installed by lenders. Agents from the repossession company will have a hard time finding your car without this tracking device.

Although removing the GPS tracker is not a permanent solution, it complements other methods of concealing your vehicle on private property to minimize the risk of repossession.

7. Keep Your Car Out of State

For those seeking a more radical approach, hiding your car in another state can be an effective option. Relocating your car away from the state where the loan originated reduces the likelihood of repossession. It is crucial to remember, however, that this procedure is neither infallible or completely secure. Before you dive into this long-haul choice, always remember to weigh up the risks and potential snags.

Related: 5 Most Reliable Used Cars You Can Buy

8. Use a Strong Gate

In the absence of a private garage, utilizing a gated compound can offer protection against repossession attempts. Whether it is your personal property or a leased space for storing goods, repo agents cannot forcefully enter these gated areas. Any attempt to damage your property or use physical force during repossession is against the law, allowing you to seek legal recourse for wrongful actions. In less populated countryside spots, this approach works a charm because there's typically a smaller chance of your car getting snatched back. In urban areas, storing your car in a garage is the preferred option to deter repo agents, as they have the right to follow you if you have missed car loan payments.

9. Park at a Friend's Garage or Neighbor's Driveway

Enlist the assistance of a trusted friend or neighbor to store your car on their property, away from your driveway or garage. Also, changing the way your car looks, like changing its color, can make it harder for repo workers to find your car. Remember, luck plays a role in this strategy, so don't immediately resume regular use of your car. Ensure the location where you store the car is considered private property, leveraging the protection it provides against repossession attempts.

Related: Credit Score & Auto Loans: How Do They Mix?

10. File Bankruptcy If Necessary

If you have no other alternatives and are drowning in debt, filing for bankruptcy might be a last-ditch attempt to save your automobile from being repossessed. A court order is issued during the bankruptcy procedure to liquidate the majority of your assets in order to settle your obligations. Certain assets, including your automobile, may be exempt from liquidation. If any debt remains after liquidation, it will be discharged. Engage the services of a professional bankruptcy attorney who can help you through the process and defend your interests.

Consequences of a Repossession

When the repo man comes to repossess your car, you may face severe consequences, including:

• Negative impact on your credit report.
• Difficulty in getting home loans, student loans and/or financial aid.
• Legal issues if repo agency sues.
• Difficulty in maintaining professional and social standing.
• Public humiliation from repo agents visiting workplaces.

To dodge this public embarrassment, some folks willingly give up their possessions as a means to keep their good name intact.

Note: These techniques are not long-term answers, but they can help for a while. Just keep in mind, that while these quick fixes can help now, they might bring some serious issues your way later. Let's dive into some smart ways to dodge having your car taken back by the bank.

Disclaimer: I am not a lawyer, and this website, the webpage or any text on it is not intended to be legal advice. You should talk to an actual lawyer about your case.

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