Reinstating an Auto Loan after Repossession

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Megan Foukes is a recent graduate from Indiana University who graduated with a bachelor’s in journalism. Megan works as a content writer for Auto Credit Express and contributes to several automotive and finance blogs.


, - June 13, 2019

If your vehicle has been repossessed, you typically have a few options if you want to get it back. You can redeem it, buy it back at auction, or you may be able to reinstate your auto loan. The surefire way to get a car back after repossession is to redeem it, but most borrowers can’t afford to do this. If your lender and state allows it, you may want to consider reinstating the loan instead.

How to Reinstate Your Car Loan after Repossession

When you reinstate your auto loan, you agree to pay the missed payments plus repossession fees in one lump sum. Not all states allow you to reinstate your car loan, but if yours does and if it's part of your loan agreement with the lender, you can try to get your vehicle back this way.

In order to reinstate your auto loan, you need a reinstatement quote from your lender that lists how much you need to pay to make the loan current. You usually have 15 days to make your lump sum payment, and your lender is required to send you a notice explaining your right to reinstate, which should include how long you have to make the payment.

Other Options to Get Your Car Back

If reinstating your car loan isn’t an option, you can either redeem your vehicle or try and buy it back at auction. Redemption is the most commonly available way to get your car back after repossession.

Within five days of having your vehicle repossessed, your lender is required to send you a notice stating your right to redeem the car. The notice includes the total amount due (the balance due on the loan plus any additional repo fees), and how long you have to complete the redemption process.

If you can’t redeem your vehicle, or you miss the deadline, you can attend the auction and bid on your car. This isn’t a guarantee you can get your vehicle back, but if you do, you’re also responsible for paying the lender any loan balance plus repossession fees in addition to what you pay for your car.

If none of those options work, a last resort choice is to file for bankruptcy. If you do file for bankruptcy before your vehicle has been repossessed, an automatic stay is activated and temporarily prevents the lender from seizing the car.

Having the automatic stay in place could help you get the money you need to become current on your loan, but filing for bankruptcy is serious, and shouldn’t be taken lightly. Discuss filing for bankruptcy with your lawyer before you do anything.

The Bottom Line

Once your vehicle is repossessed, you have to pay to get it back – whether you reinstate, redeem, or buy it back at auction. You can prevent repossession from happening by making sure you’re on time with your monthly payments. If you fear you can’t make the next payment, talk to your lender ahead of time. More than likely, they’re going to want to help you find a way to prevent a repossession from happening together.

If you've been through a repossession and need an auto loan, CarsDirect can help you get connected to a local dealership that knows how to handle bad credit situations. Our process is simple, free, and doesn’t put you under any obligation. To get matched to a dealer near you for the bad credit car loan you need, get started by filling out our auto loan request form right now!

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Megan Foukes is a recent graduate from Indiana University who graduated with a bachelor’s in journalism. Megan works as a content writer for Auto Credit Express and contributes to several automotive and finance blogs.


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