Car repossession laws are important for people who buy any cars on car loan or credit. Here we provide some necessary information regarding repossession laws. Remember there is a contract you signed when you purchase car? The agreement mainly is to protect creditor and give them the rights to repossess the car if the buyer did not pay car payment for few months under the agreed condition.

Every people who is having car loan must aware that the bank or creditor can anytime repossess the car if they fail to receive payments on time. The banks repossess the car and resell it to someone else to reduce the debt. That is the reason why there are many repo cars for sale in the market. On the other hand, if the creditor violate the rules stated in the contract and cause any damage to the car, they will have to pay you the damages. However, it is subject to some conditions and circumstances. Let’s see what kind of situation that usually happens.

Car payment not on time

The most common issue for bank to repossess the car is the payment not on time. Usually the grace period will be stated in the contract as bank will accept late payment.

Repossessed cars for sale

In general, the creditors MUST inform the owner the date of the car to resell to public. However, the owner has the rights to get back the car by paying off all the late payments, storage fees, late charges, and tow fees in given time. The owner also has the rights to demand the car to be sold.

Personal property in the car

Personal property such as CD player, sport rims, stereo, and speakers does not allow to be removed or to resell when the car being repossessed. Only items not connected to the vehicle allows to be removed.

Concealing the car

It is a crime to conceal the car with the intention to hide it from the creditor under general car repossession laws.

Repairing car repossession credit

The fastest and most efficient way to repair your credit after car repossession is to clear off all negative accounts and add on positive accounts.

Laws concerning repossession of a car

Most of the states laws allow bank creditor to repossess any cars at any hour without prior notice that violate the rules stated in the contract such as late payment.

However, the creditor has got no rights to repossess the car recklessly if the owner keeps it inside a closed garage. The creditor has the rights to come onto your property to seize the car but they got no rights to harm any property. They will have to compensate if they cause any damages or lost and the creditor may lose the rights to seize the car.

Repossession on a car could give you a very bad credit history and at least stay on your credit report for 7 years. It depends on where you stay either NJ, Oklahoma, Florida, Texas, Pennsylvania, or Ohio. Different states or countries give different period, some are 10 years.

In conclusion, it is important to read the contract and car repossession laws you are going to sign when buying any cars.