Published by the Modern Lending Solutions editorial team. Last reviewed: .

Short answer: contact your lender as soon as you see trouble coming. The FTC says: “Don’t wait for the company to repossess your car” (FTC). If the car is repossessed and sold for less than you owe, you can still owe the difference. The CFPB and FTC pages quoted here were read on October 30, 2026. This is general information, not legal advice.

Call the lender early

  • The FTC says you might be able to negotiate a delay in your payment or a revised schedule of payments (FTC).
  • The CFPB lists options a lender may have, such as a payment deferral, a change of due date, a payment plan if you are already behind, and refinancing (CFPB).
  • Each option can add interest over the life of the loan, so compare the totals. See skip-a-payment offers and changing your due date.
  • Ask the lender to confirm any change in writing, and note the name of the person you spoke with.

When a car can be repossessed

  • The CFPB says that in some states a lender can repossess a vehicle without a warning or a court order after you miss a payment, while other states require a notice first (CFPB).
  • Your contract should say what puts you in default; the FTC says not making a payment on time is a typical example (FTC).
  • The lender cannot “breach the peace” when it takes the car (FTC). If it does, the CFPB says you can contact law enforcement, and it may give you a claim for damages or a defense (CFPB).
  • If you are an active-duty servicemember, the CFPB says the Servicemembers Civil Relief Act prohibits repossession without a court order for auto loans you entered into before your military service (CFPB).
  • A voluntary repossession might mean fewer fees, but the FTC says you are still responsible for the deficiency (FTC).

Getting the car back

The CFPB says you have the right to be notified before the vehicle is sold or kept for the debt. For a public sale, the lender must tell you the date, time and place; for a private sale, the date after which it could be sold. You may be able to buy the vehicle back before the sale by paying the full loan amount plus repossession costs (CFPB). Some states also let you reinstate the loan by paying the past-due amount plus repossession costs (FTC).

Your personal property

  • The CFPB says to contact your lender right away to arrange a time to get your belongings, and to document what you left in the car and its estimated value (CFPB).
  • If the lender or repossession company demands payment to return your property, the CFPB says you should consult an attorney (CFPB).
  • The FTC says the lender cannot keep or sell personal property found in the car until a certain amount of time has passed, set by state law (FTC).

Deficiency balance

If the car is sold, you may owe the difference between what is left on the loan, plus repossession fees, and the sale price. The CFPB calls this a “deficiency balance”; if the car sells for more than you owe, you are entitled to the surplus (CFPB). The CFPB's own example: owe $10,000, the car sells for $7,500, and you owe a $2,500 deficiency plus repossession fees (CFPB). Lenders must sell the car in a commercially reasonable manner, and repossession fees must be reasonable (CFPB). If you do not pay the deficiency, the lender can try to collect it or hire a debt collector (CFPB).

Credit

The CFPB says a repossession could stay on your credit reports for up to seven years, and that a repossession made in error can be disputed with the credit reporting companies (CFPB). If a payment is already late, see what happens after a missed loan payment.

State rules

Notice, reinstatement and property rules differ by state. Both the CFPB and FTC point you to your state attorney general or consumer protection office for the rules where you live (CFPB; FTC).

Before you borrow against the car

Before you take a title loan, which uses your car as collateral, see vehicle title loan risks. For how a car loan compares with an unsecured loan, see personal loan vs auto loan for a car.

Checklist

  • Call the lender before the next payment is missed.
  • Get any new payment plan or deferral in writing.
  • Read your contract for what counts as default.
  • If the car is taken, list what was inside and ask for it back.
  • Watch for the sale notice and ask for the list of repossession costs.
  • Check your state rules with your state attorney general.

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Sources

  1. FTC: Vehicle Repossession
  2. CFPB: What happens if my car is repossessed?
  3. CFPB blog: Worried about making your auto loan payments? Your lender may have options that can help (February 2020, archived)

Disclosure: Modern Lending Solutions is not a lender, loan broker or agent for any lender or loan broker, and does not make credit decisions. Any compensation we receive is paid by participating lenders, only for advertising services. This guide is general information, not financial or legal advice.