How not to get your car repossessed

How not to get your car repossessed.

Losing your car can, in today’s fast paced world, be a fatal blow to a family or individual. In a society where long distances are the norm, not having a car can make it impossible to get to work, school or even the shops. Losing your car to the lending company, having it repossessed, is therefore not only embarrassing and stressful, it is a hardship in its own right.

However from the moment we are advised by our creditor that our car loan is in arrears and that if we don’t pay promptly he will be forced to repossess his car we go into panic. Some become so stressed and anxious that they prefer to lose the car to the repossession agent than to have to cope with all the hassle. Wrong! Mistake. Nobody is going to hide the fact that it is anxious and even embarrassing to find yourself in a repossession situation. However simply letting go is not the answer. Allowing your car to be repossessed  destroys your credit score and credibility. What is more, there are other options.

1) Sketch out a plan to bring your finances on their feet. Be ruthless. Slash expenses wherever you can. Everybody is suffering the economic situation and are making cuts, so can you. Go back to basics, food, shelter and some clothes. Go back to old fashioned entertainment, read a book, play sports. If you have lost your job make it your full time (that is at least 8 hours a day) job to find a job. Accept anything to start with and build up from that.

2) Talk to the repossession or lending company. As soon as you realize you are going to default on one of your payments contact them and explain to the m the situation. Give them the budget you created and tell them how you plan to get out of this situation and pay them back. This will show your goodwill and may very well cause the lending company to give you a  brake. If they feel there are good chances your situation will change they might allow you to pay interest only for a set period or even give you a loan break.

3) Refinance. Finance companies are often happy to refinance a car loan for a longer tenure and smaller payments, this increases the interest they receive, which is what they are all about. Do this early in the day so that you still have some leverage. If you are already months in the red it is unlikely your finance company will want to take any risks for you.

4) Worst case scenario, sell your car. By doing it yourself you are much likely to get a good price. You might even by a sympathetic buyer that is willing to buy your car at a good price and then resell it back to you when things improve. Whatever the case if you sell it yourself you will be able to pay most of your loan and possibly reorgonize any payments pending with your finance company without getting your credit score destroyed.