How to Avoid Having Your Car Impounded
Buying a car with a bank loan is so common that most of us don’t even think about it, and these days it’s increasingly common for you to need a bank loan to buy a used car. When you take out a car loan, you sign an agreement that says you’ll make the required payments, or the lender can come and take the car from you, but car dealers don’t have a reputation for explaining how much a loan will really cost — and how difficult it will be. keep up with her payment.
In most states, all it takes to default on your loan and start the repossession process is one missed payment, so now you’re sweating watching the street for tow trucks. You’ve fallen into the classic Catch-22 trap: you need a car to get to work, to buy groceries, to live your life, but you can’t afford your car. How to avoid car confiscation?
What not to do if you are worried
First of all, here’s what not to do if you’re trying to keep a car that’s been put on the seizure list. There are some very bad ideas that you should not be tempted to:
- Hiding a car. This may seem like a brilliant idea, but it’s probably illegal. You voluntarily signed an agreement with your creditor, and part of that agreement dealt with what would happen in the event of a default. Hiding a car is a bad idea.
- Opposition to the repo agent. Physical threats or verbal abuse to the person who comes to tow your car will get you nowhere and can lead to trouble. In addition, even if you manage to drive them away, you will miss any chance of getting a little freedom of action from them in the future.
- Car disguise. Replacing license plates and covering up the Vehicle Identification Number (VIN) on a car only slightly complicates the job of a forfeiture specialist. It’s illegal in most states to hide the VIN, so the repository will just call the police and they’ll be in their power to unlock the car and remove the obstruction. And the repo has several ways to identify a vehicle, so your efforts are likely fruitless anyway.
- sit-ins. If you see a seizure agent approaching, you might think that jumping in the car and locking the doors is a great idea. And yes, it’s true – they won’t break windows and drag you out or tow the car with you in it. But all you do is kick the can down the road. The refund person will be back, probably just before you leave for work in the morning.
Strategies that might work
So what can you do if a confiscator is after your trip? Here are a few things you can do to keep yourself out of trouble:
- Keep it in a closed garage. If you have a garage that can be locked, you can hide the car there (technically, this doesn’t mean you hide the car, because everyone knows exactly where it is). Contrary to popular belief, foreclosure agents are allowed to enter private property to claim a vehicle, but they cannot “disrupt the order”, which usually means they cannot use force or violence to do so. This includes bypassing locks on private property. However, if the garage is not locked, they have every right to open it and take the car. Most auto loans include what’s called a “collateral agreement,” which allows agents authorized by your lender to enter private property. Keep in mind that this will only work up to a certain point – eventually they will either pick up your car from somewhere else while you drive it, or get a court order and bring the sheriff with them.
- Negotiate. Your lender doesn’t want your car. They want the sweet interest you agreed to pay on the loan. The car itself lost most of its value the moment you took it out of the lot, and it’s been getting more and more worthless ever since, so they’d rather have your money. If your car is impounded, try calling your lender to negotiate a deal. They will often be open to any arrangements that involve you eventually repaying the loan. You can also try talking to an agent upon repossession. They don’t have the power to override your withdrawal, but they do have the ability to put your case at the bottom of their to-do list. There are no guarantees of success, but if you call them and ask them to give them some leeway, it might give you some breathing room.
- Sell a car. If you’re not in default yet, but you know it’s coming soon, you can find out if you can sell the car for enough to pay off the loan. Make sure you know all the fees you will have to cover and that there are no penalties for paying off your loan early. Obviously, this leaves you without a car, but it also saves your credit history so you can buy a cheaper car.
- Bankruptcy. If you can declare yourself bankrupt, you can probably keep your car even if you are in default, as long as you can work out a payment plan with your creditor. Both the Chapter 13 and Chapter 7 forms of bankruptcy that are open to individuals offer the option to hang your car. Bankruptcy is not a magic bullet, but it offers a real chance to keep your car in the short term and restructure your loan in the long term so you can pay it off.
Losing your vehicle due to re-ownership can turn a bad financial situation into a financial stalemate. Your options are limited when it comes to keeping a car from repo professionals, but there are a few options. Just don’t do anything crazy.