Repossession is a scary word for vehicle owners and can sound like it’s the end of the road. It is true that financing after repossession is extremely onerous, but it is not impossible. Of course, lenders and dealers would encourage the previous owners to wait as long as possible before attempting to acquire a new auto loan; however, this is simply not an option for some drivers. Luckily there are creditors out there who are willing to work with those in unfortunate circumstances including a poor credit report.
So, you have concluded that you are absolutely financing a different vehicle—what’s next?
It’s crucial to be communicating with your creditor to be knowledgeable of the repossession—know your credit report, the remaining balance of the vehicle and why it was repossessed. Every state’s laws are different, so do the research to be aware of your rights. Once there’s a full grasp of your financial situation it’s time to pay that debt off immediately or as soon possible. After this is done, it is time to explore options for loans to purchase your next vehicle.
The good news is, creditors have been more generous in recent years. The bad news is that a repossession can remain on a credit report for up to seven years. In addition, those with a repossessed vehicle on their credit report won’t be offered the best interest rates. There is no reason why this should be discouraging because ultimately, you are in control of your financial choices. Entertain every opportunity for taking a loan and don’t accept anything that you know will overwhelm your bank account.
Getting a “new-to-you” vehicle after repossession is your opportunity to rebuild your credit and make sure that repossession never happens again. If you are struggling with payments, remember to contact your creditor and find out what your options are.
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