Question by Phillip D: Car Repo/ Bank Default.?
So.. I have always wondered. If you get a car loan and stop making payments what happens to the loan? I understand the bad credit part.. but I would like to have a more specific answer for the actual loan. The car gets repossessed, but what happens next. Are you responsible for the full loan still, or just what is left over when the bank whole sales the car? I know they will whole sale it, but will they apply that profit towards what you owed them? Leaving a smaller balance for you to be obligated to?
Best answer:
Answer by Poppy
The car is repossessed. It’s then sold at auction and you are responsible for the balance between what the car brings and the remainder of the loan. They seldom bring near retail in those auctions either.
What do you think? Answer below!
2 Responses
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ken k Says:
unless you are current on the value of the car you will get hurt/if you owe 4 grand and the car does 2500 at auction you are on the hook for the difference plus about another grand or more in fees/towing/seller fees at auction and storage/they run it up plus the interest on those fees//repos never benefit the guy paying
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whocares Says:
Car repoed, repo fee & storage charges added. Car sold and the net amount less sale fee & related expenses gets deducted from the loan amount. You are billed for the balance.
Collection attempts will be made. Then it will go to a collection agency where further collection attempts will be made.
If you still fail to pay and have a garnish-able job, the account will get forwarded to an attorneys office who will give you yet another chance to pay voluntarily.
If all those do not result in you paying or showing effort, they will sue you, easily win because theres no doubt. After winning, they can garnish your wages in most states.
That entitles them to take 25% off your gross paycheck before expenses. The garnishment will remain until the entire debt is collected in full. Your employer is forced to withhold the money and forward to the court/lender.
