If your car loan lender repossessed your car, van, truck, motorcycle, or other vehicle and you want it back, you'll have to act quickly. There are several options for getting your car back. Regardless of which one you choose, the lender must give you a "reasonable time" to exercise these options before it sells the car. If you don't act within this time period, you'll lose the opportunity to get the vehicle back. (To learn the basics about car repossessions, see Car Repossession Laws: An Overview.)
If you want to get your car back after repossession, you have several options:
But whatever you do, you must act quickly.
There is no hard and fast rule on how much time you have to get a car back before the bank sells it. Generally speaking, the creditor must give you notice that allows a “reasonable time” prior to the sale for you to react and exercise your options. At least ten days notice is usually considered reasonable. Your state's law may also be more specific about timing of notices. For example, California requires at least 15 days notice prior to the sale.
You can redeem the car at any time prior to the private sale or auction. To redeem, you pay the entire loan balance plus certain costs and fees. The notice of sale—which the bank should have sent you -- will contain information about what you need to do to redeem, including a telephone number for you to call to find out the payoff amount and how to make payment.
The bank is required to send you this notice shortly after it repossesses the vehicle. Some states require notice within 48 hours after repossession (such as California). Regardless of the timing, the creditor must give you written notice that gives you the information you need to exercise your right to redeem within a reasonable time period before the car is sold.
During the redemption period, the creditor may report the fact that the car was repossessed to the credit reporting agencies. If you redeem, your credit report would had to have been updated to reflect that. But the report could also still indicate that the vehicle had been repossessed.
If you are allowed to reinstate the loan by state law or by the terms of your loan agreement, then you may have even less time to act. To reinstate the loan, you pay off the overdue amounts (plus certain costs and fees) to bring the loan current.
State laws vary on the amount of time you have to reinstate the loan. Usually, you are allowed only 15 days after the repossession to reinstate the loan. If your right of reinstatement is based on the loan agreement, then the time period may be more or less, depending on what the agreement says.
If more than five days have passed since the repossession and you still haven't received a notice from the creditor, don't wait any longer. Contact the bank and obtain the information you need to redeem, reinstate, or bid on the car before it is sold.
If the bank didn't give you the required notice before selling the car, you can use this as a defense if it tries to get a deficiency judgment against you. (To learn more, see Defenses to Car Repossession Deficiency Lawsuits.)