How Many Car Payments Can I Miss Before It’s Repossessed?

Vehicles on a dealer lot

We’re often asked the question “how many car payments can I miss before it’s repossessed?” by our patrons. Many people fear that all it takes is one missed payment, and while there are some institutions that may apply this rule, it’s far from typical. Generally speaking, it takes three or more missed payments before repossession happens. Keep in mind, a payment is not considered missed until it’s over 30 days late. 

What Happens When Your Car Is Repossessed?

If you’ve missed too many car payments and are facing repossession, three things will happen next:

  1. You’ve probably heard of “the repo man.” This is the unofficial term many people use when they’re actually talking about a repossession agency – a third party service hired by lenders to collect the vehicle in question. 
  2. The repossession agency will tow your car to an impound lot where it will typically be held for 30 days. Once it’s there, you have 30 days to get your car back by settling your payment debt and paying the repossession fee. 
  3. If you do not take care of your payment debt and repossession fee within 30 days, the lender has the right to auction your vehicle off. The money they receive for it will then be put toward the amount you owe, but you will likely still be left with more payments to take care of. In the rare case that they make more than what you still owed, they would then have to give you the balance.

How to Avoid Repossession

Even if you’ve already missed a full payment, there is still time to get yourself back on track. Don’t be afraid to speak honestly with your lender, as they will often prefer to work with you rather than get into the repossession process. Take a look at the following tips to get started:

  • Understand your car loan. Ensure you have a clear understanding of your loan terms, including your payment schedule and interest rate. If you haven’t already, you’ll also want to read up on clauses surrounding missed or late payments and find out what you signed off on in terms of loan default.
  • If you’re not following a budget, now is the time to start. After gaining a better understanding of your auto loan, you should create a budget for all of your expenses. You may find that you’re spending too much on things like fast food or frivolous clothing and accessory purchases that you don’t need to survive – money that would be better spent on car payments.
  • Honestly assess whether your missed payment is a one-time issue. If you had a financial emergency this month and missed your car payment, but you’re confident you can get it taken care of and get back on track next month, there’s really no reason to worry. But, if your honest assessment shows that you’re likely to miss a second and third payment if you don’t take action now, you should contact your lender as soon as possible. Talk to them about the possibility of loan deferment, refinancing, or even arranging a trade-in for a more affordable model. Again, most lenders would rather work with you now than have to put both of you through the repossession process in the future. 

Contact Xpress Cash for Additional Help!

If you have lingering questions about car repossession or would like professional help assessing your finances, Xpress Cash is here for you. We have multiple locations across Michigan, Idaho, and Wisconsin, and our friendly staff is always happy to help you get back on track. Contact us today to get started!