Car repossession, the facts you need to know

Car repossession, the facts you need to know.

Imagine you are walking down the street. You have just finished work and you going to get your car. A man comes towards you, tells you he is from the finance compnay that owns your car loans and demands the keys of the car. You are late on your car loan payments and he needs to repossess the car. A lady that is doing the rounds on YouTube.com had that very thing happen to her recently. She fought it out with the car loan company but finally had to let the car go.

Repossession of a car comes across to us as a violent, immoral action. Mainly because we forget that if we have a car loan, we don’t really own the car. Yes, the vehicle you rely on to get to work, go shopping and take the twins to school is not yours until you pay the last installment. Therefore paying regularly and on time is very important if you appreciate having the use of the car. Yes only the use, remember it is still not yours.

So what are your rights, what can you do to protect yourself from repossession?

The obvious answer is to make the payments on time and you will be fine. The fact that the car is not really yours will be immaterial. However if you don’t make your payments, you will be in default of your contract and in most countries and states the company that provides the loan will be in their right to take their car back.

It is true that the loan company has the right to take their car back. But they do have to follow some rules. It is useful for you to understand these rules. The loan company must not commit a breach of peace when repossessing their vehicle. Threatening you, attacking you, and damaging your property to remove their car forcibly is not allowed. If the car loan company commits a breach of peace you might have grounds to sue them and it will affect their case if they sue you for the difference between the sale of the car and what you owe them.

You also enjoy some rights when the sale of your repossessed car begins. You will have to check your particular country or state, but in most places you are allowed a favored bidding chance on your car. In many cases you can restart your loan of you pay your late payments and any other expenses.

It is important to note that even after the car loan company has repossessed and sold your car, they can still sue you for the difference between the money they sold the car for and what you owe on it. The car loan company is not forced by law to get a great price or even a decent price for your, sorry, their car. However if they sell the car at a ridiculously low price it might work in your favor when they try to sue you for the difference.