The decision to purchase a new car is exciting. Vehicles provide independence and mobility. Whether you’re purchasing a car for the first time or not, having the means to drive is liberating. You can go anywhere, whenever you like.
Buying a vehicle that suits your needs and your budget can be a challenge. Often, the vehicle that we would like to drive may not be the vehicle we can afford. Before going to the dealership, take some time to shop around for a vehicle as well as the credit you’ll use to purchase the vehicle. You want to make a purchase with financial terms that are right for you.
Auto Loan Default
Bank repos occur when the borrower does not meet the terms of a signed loan agreement. If the borrower defaults, the bank, credit union, or lending institution can take the vehicle back at any time. Repossessions often take place when a borrower:
- Fails to make payments in full
- Fails to make payments on time
- Fails to maintain auto insurance
- Passes away
Once your vehicle has been repossessed, the bank is required to provide you with a notice detailing terms to retrieve your vehicle. If you are not able to meet those terms, the bank may sell your vehicle at a private sale or auction.
After the sale, the bank will send a notice to confirm the amount of the sale. That amount will be deducted from any balance owed on the loan. If there is a deficient balance, the bank will inform the borrower of that amount and take steps to collect.
Avoid Bank Repo
Always shop around and consider your options before your buy a new vehicle. Be sure to choose a car that you’re confident you can afford. Get all the details of your car loan agreement in writing and ensure that you’re aware of the terms of the agreement. Always pay in full and on time to avoid default.
If you think your vehicle may be repossessed, follow these steps.