What to Do if Your Car is Repossessed by Mistake

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Contributing Writer

Amy Fortune is a contributing writer for CarsDirect and lead writer/editor for AutoCreditExpress. She also contributes regularly to several other high-traffic blogs. Amy was born in North Carolina and grew up with an appreciation for NASCAR and everything automotive. Now based in the Motor City, she continues to be happily immersed in car culture and automotive finance.


, Contributing Writer - October 31, 2016

Having to deal with auto repossession is always stressful, but it might be even worse if your car is repossessed by mistake. Think about it. You've either made all of your payments on time or you own the car outright. But, suddenly, the repo man is knocking on your door. Or, even worse, he's hauling off your car when you're not looking.

If your vehicle is taken, you could miss work or your kids may not make it to school. Even if the lender or repo company owns up to the error, is there further action you should take? What if your car is damaged while being repossessed by mistake? Can you sue for compensation?

Because there are several reasons why a vehicle might be mistakenly repossessed and because repo laws vary from state to state, you will probably need to contact a lawyer.

Why a Car Might be Repossessed by Mistake

Of course, in the event of an unlawful repossession, your first concern will be getting your vehicle back. Then, once you've had time to get over the initial shock, you'll want to figure out why your car was taken. So, in case you're ever forced to deal with this difficult situation, here are some of the most common reasons for auto repo mistakes:

  • You're not late with your payments, but a paperwork error or computer glitch makes it look like your loan is in default.
  • You've changed car insurance providers, but the lender never received notice of this change. To them, it just looks like you're vehicle is no longer covered.
  • The repossession company has simply gone after the wrong car.

If you know for a fact that the repo is a mistake, you should immediately contact a consumer advocacy attorney. Even if the lender or repossession company seems like they're going to be reasonable, communicating with them through a lawyer will help if you want to pursue legal action.

Recovering from a Wrongful Repossession

Once it is officially determined that your car was repossessed by mistake, you and your attorney should discuss potential options. When figuring out the best course of action, here are the most important items to address:

  • Getting Your Car Back: Your number one concern is taking back possession of your vehicle. And if it is perfectly clear that the repo was the result of an accident, this shouldn't be a problem.
  • Clearing Your Credit: If the repossession is reported to the credit bureaus and ends up on your reports, you need to have it removed. A repo can do serious damage to your credit score.
  • Damage Compensation: If you can prove that your vehicle was harmed during the unlawful repossession, repairs for these damages might be covered by the lender or the repo company. However, you should consult your lawyer before assuming anything.

When it comes to issues like whether or not you can sue for money to cover your time out of work, emotional damage, etc., only a licensed attorney will be able to give you meaningful advice.

Recovering from a Legitimate Repossession

If, on the other hand, your car has been legally repossessed because of missed payments, your credit has taken a big hit. So, if you need to finance a vehicle purchase, you may have trouble getting approved for an auto loan.

The team at CarsDirect understands your situation. In fact, if your credit has been damaged for any reason, in most instances we can still help you buy the car you need. How? We’ve partnered with the best loan providers in the country in order to give you a second chance and a fresh start.

Our 1-Step Auto Loan Application only takes a minute to complete, so go ahead and get started today.

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, Contributing Writer

Amy Fortune is a contributing writer for CarsDirect and lead writer/editor for AutoCreditExpress. She also contributes regularly to several other high-traffic blogs. Amy was born in North Carolina and grew up with an appreciation for NASCAR and everything automotive. Now based in the Motor City, she continues to be happily immersed in car culture and automotive finance.


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