How Late Can You Be on a Car Payment Before Repossession?

Lenders can begin repossessing a vehicle after a missed payment, but the exact timing depends on your lender and the terms in your loan agreement. Many lenders may start the repossession process if you’re 90 days late, but some could act sooner. Here’s what you need to know about late payments and how to avoid repossession.

How many days late can you be on a car payment before repossession? 

The specific timeline for repossession varies based on your lender’s policies and your loan agreement. While some lenders may wait up to 90 days (three missed payments), others can start the process as early as one missed payment, especially if there’s a history of late payments.

State laws may require lenders to notify you before repossession. For instance, in Massachusetts, lenders must provide written notice and allow 21 days to catch up on payments.

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Tip

Review your loan contract to find your lender’s policies, or contact the lender. Many lenders offer options for borrowers facing financial challenges, so it’s often worth discussing alternatives if you’re concerned about missing a payment.

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What happens when your car is repossessed? 

Here’s how repossession generally works.

• Notification requirements: Many states require lenders to send written notice before repossession, detailing your rights and how long you have to catch up on payments. The lender might also call you if you’re behind on payments.
• Timing: Lenders typically aren’t required to tell you the exact time of repossession. If you’re unable to get current, they can send a repossession company to retrieve your vehicle.
• Remote disablement: Some vehicles have “kill switches” that allow lenders to disable the car remotely, preventing it from being started or moved.
• Access to your vehicle: State laws vary. In Massachusetts, for instance, repossession agents need permission to enter private property, such as a driveway, to take your car. However, if your car is on a public road, the repossession company can retrieve it without permission.

Can you get your car back if it’s repossessed?

Yes, you may be able to recover your car after repossession. Here are your main options:

Reinstate or pay off the loan

You can typically get your car back by paying the entire loan balance or by catching up on missed payments (known as reinstatement). Be prepared to cover additional fees, like storage or towing.

Buy back at auction

If your car is auctioned, you might have the option to buy it back. Some states require lenders to notify you of the auction date, but you can contact your lender directly to confirm.

Deficiency balance

If the auction doesn’t cover the full loan balance, you may still owe a “deficiency balance.” Depending on state laws, the lender could pursue collection on this balance.

Surplus proceeds

If the car sells for more than you owe, some states require lenders to refund the extra amount to you.

How repossession affects your credit

Missed car payments appear on your credit if you’re over 30 days late. These can damage your credit slightly, but a repossession has more serious effects. If your car is repossessed, the repossession will stay on your credit report for seven years. 

The repo process involves multiple actions on your lender’s part, each of which may harm your credit:

• Missed payments: Your lender will report missed payments to the major credit bureaus after you’re late by 30 days. Each missed payment will hurt your credit score. 
• Loan default: A loan default can also harm your credit and is generally separate from missed payments. Your auto loan contract should detail what it means to be in default on your loan. 
• Collections account: If your account is sent to collections due to a deficiency balance, that will also be noted on your credit and hurt your credit scores.

Lenders view your credit report like a report card on how well you handled past loans and credit. Having missed payments and collections accounts on your credit report can be like having an “F” on your report card.

A lender will look at this and either deny any future loans over the next seven years (that’s how long it will stay on your report) or be willing to lend you funds but at a high interest rate. Long story short, it will cost you.

Crystal Rau, CFP®

Can I avoid repossession if I’m late on car payments?

You might be able to avoid repossession even if you’re struggling and can’t make your monthly payments. Here are the steps you can take.

1. Contact your lender. Many lenders are willing to work with borrowers in a tight spot. For example, the lender might be willing to issue you a deferment, which lets you pay later in your statement cycle.
2. Consider refinancing. If you’ve missed several payments, the situation becomes more complicated. In this case, refinancing your loan to reduce your monthly payments or trading in your car for a cheaper one might be the better solution. 
3. Avoid payday or car title loans. Taking out a short-term loan may be tempting if you’re facing a financial emergency and trying to keep your car. However, these loans tend to be predatory, with high rates and fees. A loan like this could send you spiraling into an overwhelming debt cycle, putting you in an even worse position than where you started. 
4. Consider asking a trusted friend or family member for a small loan. This is especially true if you anticipate your financial situation will improve soon—for instance, if you lost your job but are starting a new one soon. Just ensure you work out a payment schedule and terms ahead of time and stick to those. Doing so will help you avoid straining your relationship while you regain your financial footing. 

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Tip

Don’t feel comfortable asking a friend or family member for a loan? These are our highest-rated cash advance apps.

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Consider getting rid of the car altogether. The longer you hold on to a vehicle, the more it depreciates. If you can sell the vehicle, apply the funds toward the loan. You may be upside down for a little while, but you should have a smaller loan balance than you will if you wait longer.

You can also find somebody willing to assume your loan and take over the car and car payments. The lender must approve this, but it’s a way for a buyer to assume a potentially lower interest rate if you took out the loan a few years ago.

Crystal Rau, CFP®

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