Having a vehicle repossessed is a shocking occurrence. Suddenly, you’re left without transportation to get to work, school and run necessary errands. Although it’s an unfortunate situation, it’s not a hopeless one. If you act quickly, you may be able to get the vehicle back. Here are some steps to take if your vehicle is repossessed.    

Act Quickly

Once the lender takes possession of the vehicle, you must act quickly to ensure all options are available to you. While laws vary by state, most states require only a “reasonable” amount of time between the repossession and the vehicle going on the auction block. In most states, it’s around 10 days give or take, so you don’t have much time to decide what to do.

Find Out Why

Of course, the most common reason for a vehicle being repossessed is the borrower falling behind on loan payments. But, it’s not the only cause. In some cases, lenders will repossess a vehicle for other reasons, such as not having adequate insurance. Even if you think you know exactly why your vehicle was repossessed, call the lender to confirm. Having all the necessary information allows you take accurate next steps.

Assess Your Financial Situation

Now is the time to take a long, hard look at your finances. If you have been falling behind on car payments, does it really make sense to get the car back (assuming you can)? You may find yourself facing repossession again in a few months.

Take a look at other options, such as using public transportation, sharing a vehicle with a friend or family member, or buying a used vehicle for cash, before deciding to get the repossessed vehicle back.

Know Your Rights

Having a vehicle repossessed can leave you feeling helpless, but you do have legal rights that must be honored. For example, the lender can’t sell or keep any personal items in the vehicle at the time they take it; they must return them to you. Additionally, they aren’t allowed to damage property in the process of retrieving the vehicle — breaking the garage door or picking the lock, for example.

You May Still Owe Money

If the repossessed vehicle is sold at auction, you may still be responsible to pay some money. If it sells for less than the outstanding loan amount, the remaining balance is your responsibility. For example, if the loan balance is $12,000 but the car sells for $9,000 at auction, the lender will come after you for $3,000. If you choose not to pay, the lender can sue you to retrieve the deficiency balance.

Work Toward a More Stable Future

Going through repossession isn’t a pleasant experience, but it can be a learning opportunity. Once everything is straightened out, start working on becoming financially stable by following a budget, limiting your use of loans and credit cards and starting to save for emergencies. If you’re feeling overwhelmed, credit counseling is a great place to start. It will help you see just where you stand financially, as well as providing a budget and action plan for moving forward.