Car repossessions have hit a 15-year high. Cox Automotive estimates lenders hauled away about 1.73 million vehicles in 2024 — the most since 2009. And Fitch Ratings says the share of subprime borrowers at least 60 days behind has never been higher.
Bankrate reports late car payments are now at a 15-year high. Translation: A lot of people are one bad month away from losing their rides.
But falling behind doesn’t mean the tow truck is inevitable. You’ve got more control than you think — if you act before the lender does. Here are five moves to make right now.
1. Call your lender before they call you
I know — phoning the people you owe money to ranks somewhere below a root canal. Do it anyway.
Most lenders won’t start the repossession process until you’re around 60 days past due, according to Experian. That window is your opportunity, not your enemy.
Ask about a deferment. Many lenders will let you skip a payment or two and add them onto the end of the loan. You’ll still owe the money, plus interest, but you’ll stop the bleeding.
Get any deal in writing. A friendly phone promise means nothing if it’s not documented.
2. Ask to lower the payment, not just delay it
A deferment buys time. A lower payment buys breathing room every single month.
Ask your lender about a loan modification — stretching the term to shrink the monthly bill. It’s not free, since a longer loan means more interest over time. But more interest beats losing the car.
Refinancing is another route, and there are other ways to shrink a car payment. Just know this: Once you’re already behind, refinancing gets a lot harder. So move before the late payments stack up.
Quick aside — most internet financial advice comes from people who weren’t alive during the last recession. I’ve been writing about money for more than 35 years. Want rock-solid advice? Sign up for the free Money Talks Newsletter. Takes 10 seconds. No fluff. No spam.
3. Know the rules in your state
Repossession laws aren’t the same everywhere. In many states, the lender has to give you notice, and some give you a chance to catch up and get the car back.
Check with your state attorney general’s office to learn exactly what your lender can and can’t do.
One thing that’s true almost everywhere: Anything personal you left in the car is still yours, and the lender has to return it. If a repo feels close, make a list of what’s in your vehicle now.
4. Sell the car yourself before the lender takes it
If the payment is simply more than your budget can carry, selling the car on your own terms beats handing it to the repo man.
Why? You’ll almost always get more for it than a lender will at auction. And the more you get, the less you owe afterward.
Whatever you do, resist rolling the old balance into a new loan. The Consumer Financial Protection Bureau found borrowers who do that are 1.5 times as likely to face repossession within two years.
There’s a catch on selling, too. If you owe more than the car’s worth — being upside down — you’ll have to cover the gap to clear the title. Painful, but cleaner than a repo on your record.
5. Get free help — and brace your credit for what’s next
If your whole budget is underwater, not just the car, talk to a nonprofit credit counselor. We keep a list of places that offer free help with debt that won’t gouge you.
Understand what a repo really costs. After the lender sells your car at auction, you can still owe the difference between the sale price and your loan balance. That’s called a deficiency, and it doesn’t just go away.
A repossession also stays on your credit report for seven years from your first missed payment. I broke down exactly how a repo hits your credit in a separate piece — worth a read before things get that far.
The bottom line? A rough patch with your car payment isn’t the end of the world. But silence is your enemy. Pick up the phone, know your rights, and act while you still hold some cards.
And once you’re back on solid ground, build even a small emergency cushion so the next surprise doesn’t put your car at risk.
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