Car repossession can sometimes be prevented if you keep in touch with your lender. But not everyone is able to save their vehicle in time and their car ends up getting repo’d. The good news is that not all hope is lost just because your vehicle’s been repossessed – you can still get auto financing after a repo.
Can I Get a Car Loan with a Repossession on My Credit Report?
Depending on how far along you are in the repossession process, you can attempt to get your car back. Otherwise, you typically have to wait at least a year to apply for another auto loan. Remember, the longer a repossession stays on your credit reports, the less impact it has. So, if you’re at the tail end of a repo appearing on your credit reports, you may find it easier to get approved for financing through a subprime lender. If the repo is still relatively recent, your financing options are usually going to be limited.
Many subprime lenders are hesitant to finance someone with a recent repossession. But, if you simply need a car to get by and plan on improving your credit in other ways, a buy here pay here lot is an option to consider. Just be aware that these dealers typically only have older used vehicles, so you likely aren’t going to get the car of your dreams.
How Long Does it Take for a Repossession to Drop off Your Credit Report?
Car repossessions stay on your credit reports for up to seven years. You can’t remove a repo if it’s correctly reported, but if seven years have passed and the repo is still there, or a repossession is inaccurately reported, you can take action to remove it from your credit reports.
To remove the error, you must submit a dispute either electronically or via a letter to the reporting credit bureau. In your dispute, provide documentation that proves the repossession is inaccurate or should be removed. Once it’s received, the credit bureau has to perform an investigation within 30 days, and send you a letter explaining what they plan to do. If they don’t respond within 30 days, the repossession is automatically removed from your credit reports.
What to Do after a Repossession
Once your car’s been repossessed, you can either sit back and let the creditor sell the vehicle at auction, or attempt to get it back. If you want to try and reclaim your car, there are two ways you can get it back:
- Reinstate – Reinstating a vehicle means you catch up on missed payments in one lump sum. When you do this, you bring your payments up to date and get the vehicle back. But, because the car was repossessed, you’re also responsible for repossession fees, and the repo is still listed on your credit reports.
- Redemption – Lenders are required to send you a notice with the payoff amount (including repossession fees) stating that you have the option to redeem your vehicle for the amount owed. You’re only given a set number of days to redeem the car, so make sure you act quickly if this is something you want to do. Even if you get your vehicle back, similar with reinstatement, the repo remains on your credit reports.
Need a Car after a Repo?
Going through a repossession is tough on not only you but your credit, too. It makes it difficult to find financing, and even if your repossession listed on your credit reports is close to the seven-year mark, there are many lenders that still aren’t ready to approve you for financing. If you’re struggling to find financing because of a repossession on your credit reports, let The Car Connection help.
We work with dealerships all across the country that are ready to help credit-challenged car buyers, including those who have faced a repo. We want to connect you to a local dealer that can help you get back behind the wheel. Start today by filling out our simple auto loan request form.