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

It’s no secret cars are expensive, especially after the pandemic. But how expensive? The average buyer spent about $45,518 on a car in April 2024. Unfortunately, most people can’t afford to purchase a car outright, so they turn to auto loans. 

With an auto loan, you borrow from a lender and pay interest on top of your monthly car payments. Your car secures your loan, and your lender can seize or repossess your vehicle if you default. If you’re wondering, “How many days late can you be on a car payment before repo?” here’s what to know. 

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

While it would be nice if there were a straightforward answer to how late you can be on payments before your lender repossesses your car, there isn’t. Instead, it depends on your lender, its processes, and, to some degree, your relationship with the lender.

Generally, lenders repossess your car once you’re 90 days late on your payments. But this timeframe can vary. Some could start the process after one missed payment. Other lenders may be more lenient if you have a longstanding relationship and otherwise positive payment history.

Review your original auto loan contract if you’re behind on your car payments. Your contract should indicate your lender’s timeframe and process for loan default and repossession. 

Alternatively, you can contact your lender to ask. It’s often wise to speak to your lender if you’re struggling with auto loan payments. More on that shortly. 

How many missed payments until repo?

Some lenders might initiate the repossession process after one missed payment, but often, they’ll wait until you’ve missed three payments. Again, your auto loan contract should include information about this, or your lender should be able to provide it. 

Your state also likely has laws regarding repossession, so your lender probably can’t repossess your vehicle without notifying you first. Laws may vary by state, but you can contact your attorney general’s office for more information if you’re struggling with auto loan payments.  

For instance, in Massachusetts, your lender must provide written notice outlining your rights as a borrower after nonpayment. It also must give you 21 days from when it sends out the notice to catch up on payments before it can repo your car. 

But if you receive three or more nonpayment letters, your lender doesn’t need to give you additional notices. 

What happens when your car is repossessed? 

Many—but not all—states have laws requiring your lender to notify you about nonpayment before they can seize your vehicle. Typically, your lender will notify you via a written letter in the mail, but you might also receive calls from your lender if you’re behind on monthly payments. 

Written letters will often detail your rights as a borrower and inform you of how many days you have to get current on your payments. 

That said, your lender isn’t required to notify you when it will repossess your car. If you can’t get current on payments, it can send a repo company to your home to seize your vehicle. Some cars also have built-in devices, commonly known as kill switches, that allow lenders to disable them remotely, so you won’t be able to start or move your car. 

In some states, like Massachusetts, the repo company needs permission to come onto your property and take your car from your driveway or garage. But if your car is parked on a public road, the company can take it without permission. The person may ask for your keys, but your car can be towed to the company storage facility if they can’t be obtained.  

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

Once the repo company seizes your vehicle, it might be possible to get it back. This involves paying off your loan in full or reinstating your loan by getting current on payments. You’ll also likely need to pay fees associated with the repossession, such as a storage fee. 

Alternatively, you could try to buy your car back when it’s auctioned off to the public. Depending on your state’s laws, your bank may notify you of the auction’s date. But if you don’t receive a notification, contact the bank directly to ask. 

In some cases, if the proceeds from a public auction aren’t enough to cover your loan or lease balance, you’ll have a deficiency balance you need to repay. Depending on your state laws, your lender might be able to sue you to collect this balance. 

By contrast, if your car sells for a higher price tag than your outstanding loan or lease balance, your lender may return the extra money to you. Again, the rules vary by state.  

How repossession impacts your credit

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

Besides being noted on your credit report for several 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 scores. 
• Loan default: A loan default can also harm your credit and will generally be noted separately 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.

Ask the expert

Crystal Rau

CFP®

Lenders view your credit report almost like a report card on how well you handled past loans and credit. Having details, missed payments, and collections accounts on your credit report is 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 (as that is how long it will stay on your report) or they will be willing to lend you funds but at an extremely high interest rate. Long story short, it will cost you. In the eyes of a lender, you are too much risk to take on.

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

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

• Contact your lender. Many lenders are willing to work temporarily 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.
• Consider refinancing. The situation becomes more complicated if you’ve missed several payments and can’t make future ones. 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. 
• 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 are typically predatory and often have 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. 
• Consider asking a trusted friend or family member for a small loan. This is especially true if you anticipate your financial situation will improve shortly; for instance, if you’ve recently lost your job and are starting a new one soon. Just ensure you work out a payment schedule and terms ahead of time, and then stick to those. Doing so will help you avoid placing strain on your relationship while you regain your financial footing. 

Ask the expert

Crystal Rau

CFP®

Another thing you can do is get rid of the car altogether. The longer you hold onto a vehicle, the more it depreciates. If you can sell the vehicle, apply the funds toward the loan, and while you may be upside down for a little while, you should have a smaller loan balance than waiting longer. You can also find somebody willing to assume your loan and take over the car and car payments. This will have to be approved by the lender, but it is a way for a buyer to assume a potentially lower interest rate if you obtained the loan a couple of years ago.