8 Things To Do When Buying a Car

Before any major purchase, it’s important to do some research to make sure you stay within your budget and get the most for your money… and cars are no exception. A new vehicle is a large expense and requires some planning. This is especially true if you choose to secure an auto loan to make it more affordable. Here are some steps you should take before you finance an auto loan.

1) Request your credit reports and score 

Before you start shopping for a car, get a free copy of your credit report. Your credit report is an overview of your credit history, so it reflects your overall financial health. You’re entitled to one free credit report from each, Transunion, Experian and Equifax,  every 12 months. The report will list any credit accounts you have and will show if your accounts are up to date or if you’ve fallen behind on payments.

You can also get your credit score to see a numerical summary of your creditworthiness. Lenders use this information to determine whether or not they should approve you for a new line of credit, whether it’s a credit card, auto loan, or another type.

It’s important to gather this information before you start shopping so you know where you stand with lenders. Negative marks on your credit report and a low credit score will likely make it more difficult to get a loan with a lower interest rate.

2) Calculate how much you can afford

Once you know where your credit stands, take an in depth look at your finances to determine a monthly budget for a car. Don’t forget to factor in regular maintenance costs as well. Setting a budget before you begin to shop will help you stay on track and prevent you from agreeing to an option that isn’t affordable.

3) Shop for the best interest rates

Finding the right car is only one step in the process. Separately, you should shop around for the financing. Look for the best loan terms and interest rate.

Hard Inquiry vs. Soft Inquiry

Some lenders may perform a soft credit inquiry to pre-qualify you while others may perform a hard inquiry. Hard inquiries may lower your credit score. However, lenders will view multiple inquiries from similar creditors as one inquiry if they happen within 14-45 days. Shopping for rates shouldn’t negatively impact your score.

4) Research the vehicle’s history

Purchasing a used car is a great way to save money when you’re on a budget. Before you buy a used vehicle, do some research into its history. CARFAX provides comprehensive reports on a car’s history and includes information related to accidents, odometer readings, number of owners, and service records. You want your car to be safe and reliable, so it’s important to get this information.

5) Get an inspection

It’s always a good idea to have a mechanic do an inspection before you buy. Spending some extra money in advance, could end up saving you thousands on repairs later on.

6) Take it for a test drive

Even if you’re familiar with the make and model of the car, take it for a test drive to make sure there aren’t any notable issues before you commit to buying.

7) Read the loan agreement

Before you sign anything, make sure you understand and fully agree to the terms of the loan agreement. You should be aware of the length of the agreement, your monthly payment amount, how much money you’ll end up paying overall, and what occurs if you happen to fall behind on payments.

8) Know your rights

Before you sign any contract or financial agreement, make sure you know your rights. Should anything go wrong with your new car, you’ll want to know what your options are.

Seek Legal Advice

Flitter Milz is a consumer protection law firm that represents people with issues involving the denial of an auto loan due to inaccurate credit reports.  Contact us for a free consultation if you have been denied an auto loan.

Do I Still Owe Money After My Car was Repossessed?

If you’re going through financial hardship or a difficult life event, it can be challenging to keep up with your car loan payments. Your vehicle is collateral, or your pledge to a lender that you’ll repay the loan. If you default on the terms of your loan agreement, the lender may choose to repossess your vehicle. They’re not required to contact you before the repossession.

If your car was recently repossessed, you may be wondering what happens next. Do you still owe the payments that you missed on your loan? Do you still owe the full balance after your car is sold?

What happens after a repossession? 

After your vehicle is repossessed, the lender will typically send a Repossession Notice, frequently called a Notice of Intent to Sell Property. This letter confirms that your vehicle was repossessed and tells you how to get the vehicle back. It also tells you when and where your vehicle will be sold or auctioned.

Once the vehicle has been sold, the lender will send a Deficiency Notice. This letter shows the selling price of your vehicle, and deducts that amount from the balance owed on your loan.  Often charges for storage and a repossession fee are added to the balance, then reflecting a total balance owed in order to satisfy the loan.  You’re required to pay this outstanding balance under the terms of your loan agreement.

What if the repossession was handled illegally?

Repossession agents have to follow clear laws when they repossess a vehicle. For example, they’re not allowed to harass you, threaten or touch you, or refuse to leave your property, among other laws.

If the repossession agent didn’t follow the law, you may be able to take legal action against the repo agent and the creditor at no cost.

What role do the police have during a repossession?

The local police are often contacted during a repossession. Whether the consumer or the repo agent requested that the police come to the scene, the police are there to help keep the peace. They should assist in diffusing any confrontations between the borrower and the repo agent.

If the police threaten you with arrest or insist that you turn over the keys or vehicle to the repo agent, they may have crossed the line from keeping the peace to breaching the peace. This may be a violation of your constitutional rights. You may be entitled to bring a lawsuit against the police department, the repossession company, and the lender.

Seek Legal Help

To evaluate whether your consumer rights were violated, Contact us for a free evaluation of your case. Whether you fell behind on car loan payments or not, you have rights against the lender, repo agent and police that may have wrongfully repossessed your vehicle.

How Do I Get My Repossessed Car Back in Pennsylvania?

Vehicle repossession is inconvenient and worrisome, but it is possible to get your car back.  After the repossession agent comes, the lender is to send the borrower a repossession notice, frequently called a Notice of Intent to Sell Property.  This notice will inform the borrower of terms to get the vehicle back.  Sometimes the lender will demand a full loan payoff, while other times, past due payments may be accepted.  This notice informs the borrower of the vehicle’s location, the cost of repossession and any storage charges.  The borrower usually has 30 days to arrange for retrieval of any personal property from the repo lot.

If the borrower can not meet the lender’s terms to get the car back, the lender will take steps to sell the vehicle at a private sale or auction.  Once the vehicle is sold, the lender will send a notice which confirms the selling price of the vehicle along with any remaining balance due on the loan.  This notice is called a Deficiency Notice.

Flitter Milz has pursued several class action lawsuits against lenders for improperly repossessing vehicles – whether the borrower fell behind on payments or not.  Consumers across Pennsylvania, and in other states, have benefited from the results of these lawsuits.

For example, once the distribution period of a consumer class action settlement has ended, there may be funds left over, usually resulting from class members that could not be located, are incarcerated, have passed away, or simply did not cash or deposit the settlement check. The undistributed funds are considered for cy pres , and often designated for an organization that helps disadvantaged consumers.

The Pennsylvania Legal Aid Network (PLAN), and regional legal aid societies supported by PLAN,  have been designated as recipients of cy pres awards from class action settlements pursued by Flitter Milz. These funds assist legal aid in their work to provide civil legal assistance and direct legal services for low-income Pennsylvania residents.

Attorney Cary Flitter was recognized with PLAN’s Excellence Award for pro bono achievements in 2013.

“Cary L. Flitter is a leading consumer protection lawyer and has trained many legal services attorneys in consumer law issues, has paid for legal services attorneys to attend consumer law training conferences, and directed significant amounts of cy pres funds to support consumer law practice at legal aid programs in Pennsylvania.” 

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 Free Legal Consultation

Borrowers have rights against lenders that have wrongfully repossessed vehicles.  Flitter Milz is knowledgeable about the laws governing repossession of cars, trucks, motorcycles, boats and RVs.  If your vehicle has been repossessed in the past six years by a bank or credit union, Contact Us for a free consultation.

How to Avoid Vehicle Repossession After a Late Payment

Sometimes things come up and you miss a payment on your auto loan. While it’s not the end of the world, you do need to act quickly to avoid a negative impact on your credit and be at potential risk of a vehicle repossession.

What happens when a payment is late?

Depending on your auto loan lender and the terms of your agreement, you may incur a late fee immediately when the payment isn’t received in full and on time. However, a late fee doesn’t necessarily mean the late payment will appear on your credit report.

There are guidelines that creditors should follow to comply with federal law when there are late payments. Based on these standards, a late payment can’t appear on your credit report until it’s at least thirty days past due. It’s a violation of federal law for a creditor to report an account as late prior to thirty days.

What should I do if I miss a payment?

If you miss a payment on your auto loan, try to bring the account current by making all past due payments plus late fees immediately, if you’re able to. If you wait more than thirty days to pay your balance, you run the risk of the late status appearing on your credit.

If you’re able to, set up automatic payments so that you don’t miss a payment in the future. You can also set up a calendar, email, or text reminder to stay on top of bill due dates.

What if I can’t pay the bill immediately?

Unexpected life events happen all the time and financial hardships are common. If you’re having difficulty paying bills on time, it’s still important to confront the issue and take action immediately.

If you’re experiencing a short-term financial hardship that you know will be resolved soon, contact your lender to discuss your options. They may allow you to defer this month’s payment until the end of the loan. Be sure to get any changes or updates to the original agreement in writing.

What if I can’t afford my loan?

If your loan agreement is proving to be unaffordable, you should contact your lender and have an open discussion about your available options. Explain your situation and why you’re having difficulty making payments. They may allow you to defer payments for a period of time. You may want to consider refinancing or trading in your car for another, more affordable option.

If you choose to voluntarily repossess your car, the lender must follow the law and provide you with proper documents concerning your loan and sale of the vehicle.  As well, the lender will probably list your loan as a repossession on your credit report.

What to do if you think your car might be repossessed?

If your account is sixty to ninety days late, your vehicle may be at risk for repossession. Contact your lender, if you haven’t already, and prepare for a potential repossession by following these steps.

A vehicle repossession can remain on your credit report for up to seven and a half years, so it’s important to take steps to avoid this at all costs.

Seek Legal Advice

Flitter Milz is a consumer protection law firm that pursues matters against lenders for wrongfully repossessing vehicles, and against the credit bureaus for reporting inaccurate information on credit reports. Contact Us .  Our attorneys will provide a free case evaluation.

How do I Get a Better Auto Loan?

Shopping for a new vehicle can be overwhelming on its own without even considering the auto loan application process. But if you don’t take the time to research and compare auto loans, you may end up with a bad deal.

Before you begin to shop around for the best deal, check your credit report. Your overall credit will give you a general idea of what interest rates to expect. You should also consider your budget and how much you can afford to spend each month on vehicle loan payments. It’s important to make a purchase that you can afford. If you fall behind on loan payments, your vehicle may be at risk for repossession. A vehicle repossession negatively affects your credit for up to seven years. You should also keep in mind that shorter term loans will mean that you pay higher monthly payments, but less over the course of the loan.

When you apply for an auto loan, your credit score will take a slight hit. The credit bureaus will treat several loan applications made within a short time frame as a single application. If you were to receive credit denials from several potential lenders, your credit report could be impacted negatively and your credit score may drop.

Seek Legal Advice

Flitter Milz is a consumer protection law firm that represents victims of vehicle repossession.  If a borrower defaults on a bad auto loan and the vehicle is repossessed, Flitter Milz will evaluate whether the lender violated the borrower’s consumer rights.  If your vehicle has been repossessed in the past six years, Contact Us for a free evaluation.

How Your Credit Affects Vehicle Financing

Before applying for any new line of credit, it’s good practice to check your credit report and credit score. Auto loans are no exception. A credit check will give you a good idea of where you stand and what type of interest rates you can expect. It’s also important that you verify that all of your information is correct and dispute any inaccuracies that may be bringing down your score.

However, credit scores that fall in the nonprime (620-679) and subprime (550-619) ranges may not necessarily indicate that you aren’t eligible for a reasonable interest rate. Lenders often use different tiers according to their own business needs to assess creditworthiness.

Lenders also frequently place more weight on credit history that is specific to auto loans. Timely auto loan payments in your credit history are more important than whether or not you make credit card payments on time. Always shop around to compare rates before signing an auto loan agreement.

Seek Legal Advice

Flitter Milz is a consumer protection law firm that pursues matters against lenders, debt collectors and the credit bureaus.  If a lender wrongfully repossesses a vehicle, a debt collector is abusive or the credit bureaus report information inaccurately, the consumer may have a lawsuit to pursue.  Contact Us for a no cost evaluation.

How to Finance a Vehicle when you have Bad Credit

Purchasing a new vehicle is a major decision, especially when you need to secure a loan in order to do so. Not only are you shopping for a car, you’re also shopping for the best interest rate and loan agreement terms. This process can be even more difficult if you have poor credit.

Negative credit history can make it more difficult to find an agreement with reasonable interest rates and can also make it more challenging to get your application approved. It’s important to prepare and research ahead of time before you make a decision to ensure that you choose the best option for your situation.

A loan agreement that isn’t ideal for your financial situation increases the risk of vehicle repossession. In an auto loan agreement, the vehicle that you purchase is considered collateral. Collateral acts as protection for the lender. If a borrower fails to make payments under the loan agreement, the lender has the right to repossess the vehicle. A repossession will further harm your credit and negatively impact your history for up to seven and a half years.

When you need to secure a loan for the purchase of your new vehicle, take steps to make sure you get the loan that is right for you.  If you  enter a loan agreement with unfavorable terms, you may not be able to make loan payments in full and on time.  When the terms of the loan have been broken, the lender may take steps to repossess your vehicle.

Seek Legal Advice

Flitter Milz is knowledgeable about the laws governing repossession of cars, trucks, motorcycles, boats and RVs.  If your vehicle has been repossessed, Contact Us.  We will review the details of your case at no cost, and evaluate whether your consumer rights were violated.

My Car Was Repossessed. Where Do I Go From Here?

Unforeseen Circumstances

When your car gets repossessed, you may feel a range of different emotions. Whether it’s anger, embarrassment, helplessness, or guilt, you may wonder, “How did I let this happen?” It may have been a situation beyond your control. We’re often confronted with unexpected events, such as a job loss, divorce, illness, or death in the family, which may have a severe impact on meeting our financial obligations.

Repossessing a Vehicle

When a vehicle is financed through a bank or credit union, the lender has the right to repossess the car if the borrower has defaulted on the terms of the loan agreement. For example, if you don’t make timely payments or if insurance lapses, the lender can repossess the car. The lender is not required to notify the borrower in advance of the repossession.

Usually, the lender will arrange for a repossession agent to locate the car and seize it. The repossession truck could come to your home, place of employment, or even a shopping center or restaurant where the car is parked. When seizing a vehicle, the repo agent may not “breach the peace”, which means they can’t use physical force, threaten force, or remove your car from a secured area without your permission.

How can I get my car back?

The lender will send a written Notice of Repossession, to the consumer AFTER the vehicle has been taken. This letter, sometimes called a Notice of Intent to Sell Property, will indicate terms to retrieve the vehicle within a specific period of time. If the borrower is not able to meet those terms, the lender will arrange to sell the vehicle at an auction or private sale. Once the car is sold, the lender will send a second letter, called a Deficiency Notice, to the consumer. This letter will detail the selling price of the car, any repossession and storage fees, and the total balance owed to satisfy the loan.

Do I have rights even though I defaulted on my loan?

If your car, truck, motorcycle, boat, or RV has been repossessed, a qualified consumer protection attorney can evaluate whether your rights have been violated. It will be important for you to provide a copy of your signed Retail Installment Sales Contract or loan agreement, along with any repossession correspondence from the lender to the attorney.

My loan agreement is in my car? How can I get a copy?   

Consumers will often keep their loan agreement in their car, which presents a problem if the vehicle is repossessed. In that situation, there are three ways to obtain a copy of the loan agreement.

1. Contact the lender: Write, call, email, or visit a local branch.

For example: If you had a loan with Peoples Security Bank & Trust and lived near their Scranton, PA branch, you could contact the bank office directly to request a complete copy of your loan agreement. You may need to get the bank’s contact information from a car loan statement, phone book listing, or by searching online. You will find their address, branch phone number, and email address.

Once you reach a bank representative in the repossession department, request they provide you with a complete copy of your loan agreement..

2. Visit the repo lot and obtain all of your personal belongings.

3. Contact the car dealership where the vehicle was purchased. The dealership often keeps copies of all loan agreements. You could visit the dealership to obtain a copy, or the dealership may be able to send a copy by fax, email, or through the US Mail.

Remember, when requesting a copy of your loan agreement, be sure to obtain a complete copy, front and back, and make certain that the copy is legible.

Seek Legal Help

Whether you fell behind on payments or not, borrowers have legal rights when the lender or repo agent has wrongfully repossessed the vehicle.  Contact a qualified consumer protection law firm to discuss your rights and steps to take.

Servicemembers Civil Relief Act (SCRA)

Protection from Repossession

The Servicemembers Civil Relief Act (SCRA) provides special protections for active service members that have defaulted on car loan payments.  To qualify, servicemembers must have signed the loan agreement, and paid at least the deposit or first installment payment, before entering military service. To repossess a vehicle, the lender must obtain a court order.

Reasons for Repossession

Vehicle repossessions occur for a number of reasons. Most often, a vehicle is repossessed due to missed payments or the lapse of insurance. When a car is repossessed, lenders need to follow the law, whether payments were missed or not. If the lender overlooks the law, the servicemember may bring a lawsuit against the lender.

Requirements AFTER Repossession

After a vehicle has been repossessed, the lender is required to send proper notices to the borrower. Shortly after the repossession, the lender will send a letter called a Notice of Intent to Sell Property, which confirms the repossession occurred and details terms for to retrieve the vehicle. If the borrower is not able to meet the terms, the lender may choose to sell the vehicle at an auction or private sale. Once the sale has taken place, the lender will send a second letter called a Deficiency Notice, which informs the borrower of the sale price of the vehicle and any remaining balance due.  If the borrower is not notified properly, there may be grounds to file a lawsuit against the lender.

Credit Reporting and Car Repossession

If a servicemember’s vehicle has been repossessed, he or she may face loss or denial of a security clearance, or other types of punishment based on mismanagement of their finances.  In addition, credit reports may list delinquencies or the repossession and lower credit scores, which make it difficult to obtain a new loan.

All consumers are entitled to receive one free credit report every twelve months directly from Transunion, Experian and Equifax.  Check your credit reports , and make sure the information is accurate.

Seek Legal Assistance

Servicemembers that have fallen behind on payments for auto loans and are facing repossession should seek the advice from a qualified consumer protection attorney to advise on their consumer rights.  Flitter Milz knows the laws to protect borrowers from wrongful repossession and inaccurate credit reporting. Contact us for a no cost consultation.

What are Creditors Able to Repossess?

It may seem as if a creditor has all the power in a loan agreement, but there are limitations as to what a creditor can and can’t take from you if you fall behind on loan payments.

What Can Lenders Repossess? 

In some loan agreements, a possession or property is listed as collateral. Collateral means that the borrower has pledged something to serve as protection for the lender.  In case the borrower fails to make payments under the agreement’s terms, the collateral can be repossesed if payments aren’t made on time.

Vehicles are considered collateral in auto loan agreements. If the borrower falls behind on payments, the lender maintains the right to repossess the vehicle, usually without any prior notice. If the vehicle is sold for less than the remaining loan balance, the borrower may still be responsible for paying the outstanding amount.

The same is true for homes. If a borrower doesn’t make timely mortgage payments, the lender can repossess the home. This is known as foreclosure. The home is then typically sold as a means of recovering as much of the remaining loan balance as possible.

Rent-to-own items can also be repossessed. This could include items like furniture or appliances that were rented with the option of buying.

What Can’t Lenders Repossess?

Lenders can’t repossess property that isn’t specifically listed as collateral in the terms of the loan agreement. Credit card purchases also cannot be repossessed if you fall behind on payments. And even if some property is listed as collateral in the agreement, a contract can be void if it doesn’t comply with state legal requirements. It’s also important to keep in mind that a creditor can sue you in court to recover money that you owe if the loan agreement doesn’t list collateral.

If you think your consumer rights may have been violated with an illegal repossession, contact us.