How a Repossession Works
Repossessions happen when a lender loses money and decides to take action. In most states, the lender can seize a car if the borrower is behind on payments. Usually, the lender hires a third party to take possession of the vehicle and sell it at auction. But before the sale happens, the lender will try to repossess the vehicle by putting a lien on it and selling it to itself at auction.
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When Your Car Gets Repossessed
The lender then files an application for repossession in court, which creates a legal order that says the lender is the rightful owner of the vehicle. This order tells any other potential buyers that the lender has the right to sell the car at auction.
Once the lender sells the car at auction, the proceeds are paid to the lender. The lender can then use the money to pay off any debts the borrower may have outstanding or it can use it to pay back the bank the loan it made.
Repossession can be a good option for lenders because it avoids the costs of owning the car. But it can also be risky if a borrower can find out about the repossession and buy another car before the lender has a chance to sell the first car.
Car Repossession Statistics
Repossessions are common in the auto lending industry.
- 2.2 million vehicles are repossessed every year (2022 updated data)
- 5,418 repossessions every day
- 226 car repossessions each hour
- 3.76 repossessions a minute
- 2021-2022 most repossessed car and truck (in order)
- Ford F-150 – is the most repossessed truck
- Chevy Silverado – is 2nd the most repossessed truck
- Honda Civic – is the most repossessed car
- Honda Accord – is 2nd the most repossessed car
- Toyota Camry
- Nissan Altima
- Toyota Corolla
- Honda CR-V
- Dodge Ram