What is Car Repossession?
Buying a car on loan can be a luxury, given that it can cost you a significant portion of your paycheck every month. At times, when you have other financial obligations to take into consideration, repaying a car loan can seem like a hassle. However, if you don’t make the payments on time, you run the risk of having your car repossessed. On the other hand, if you are a buyer looking to purchase a used car, it’s important that you check if the car was repossessed from the previous owner, in which case you’ll need to take certain things into account. Here’s all you need to know about repossessed cars in Ireland.
Car repossession essentially refers to the process by which a bank or financial institution that financed the car purchase takes possession of the car because the borrower was unable to pay their loan amount. There are two types of repossessed vehicles - voluntary and involuntary.
The primary impact of repossession for the car owner is, of course, that they are left without a vehicle, thus increasing their dependence on another form of transport, which could increase expenses. In addition, repossession also has an impact on the vehicle owner’s credit score. Non-payment of your loan amount is usually recorded by the lender and reported to the credit bureaus, which causes your credit score to dip, thus, making it harder for you to access loans and apply for credit cards in the future.
Types of Repossession
As explained earlier, repossession can be voluntary or involuntary. Voluntary repossession happens when the car owner understands that they can no longer continue paying their auto loan, and, hence, willingly surrenders the vehicle to the lender. While this type of scenario is not uncommon, most people mean involuntary repossession when they refer to the repossession of a car. An involuntary repossession happens when the vehicle is forcibly seized by the lender from the car owner due to non-payment of dues. While the lender will not use brute physical force to remove the vehicle from your property, they may, at times, repossess your vehicle from your property without taking your consent. Keep in mind that lenders usually only resort to this if you have continuously failed to make your payments or inform the lender about your situation.
Once your vehicle is repossessed, it does not mean your auto loan is paid back in full. Your lender, once they repossess your car, will try to auction it off in an effort to recover the cost of the loan. If the sale price is below the outstanding loan amount, you may still be held responsible to pay what you owe the lender.
Car Repossession Process in Ireland
When you take out an auto loan to finance your car purchase, you’re legally agreeing to make the loan payments within the due date specified by your lender every single month. If you don’t repay your loan, it’s the lender that will be at a loss. That’s why lenders in Ireland repossess vehicles. Keep in mind that, based on the terms and conditions you’ve agreed to, the lender may be able to seize the vehicle without any notice. So, your vehicle may be seized and taken off your property whether you are at home or not during the incident. The act of repossessing a vehicle is usually contracted by the lender to a third-party company, so there’s not much you can do to stop the repossession while it’s happening.
Once the vehicle is seized by the lender, it is usually quite difficult for the borrower to remedy the situation and get the repossessed vehicle back. The lender, in fact, will immediately try to sell it off or auction it so they can cover the cost of your loan. Keep in mind that, in Ireland, these rules regarding repossession only apply to auto loans. If you bought your vehicle on a personal loan or took a loan against your home to finance the purchase, your car is not likely to be repossessed. However, in those cases, there will be other financial implications that you need to be mindful of.
How to Avoid Car Repossession
Thinking of how to hide your car from repossession? Don’t! Instead, here are a few things you can do to avoid having your vehicle repossessed.
Check your loan contract: If you’ve only missed one payment, make sure to first read through your loan document to know if your lender offers a payment postponement feature. While not all lenders offer this, many do, and it could really help buy you some much-needed time to pay off your plan.
Notify your lender in advance: If you don’t think you’ll be able to pay the installment toward the loan, it’s in your best interests to inform the lender of the reason as soon as possible.
Make the missed payment immediately: If your financial situation changes, it’s important that you make the due payment as soon as you can. Although you may have to pay late fees, your car, at least, will not be repossessed by the lender.
How to Get Your Repossessed Car Back
Now, what if your car is repossessed — what can you do? We’ll explain!
You took an auto loan out with the best of intentions, but, unfortunately, you are unable to keep up with the payments, and your car gets repossessed. To get your repossessed car in Ireland back, here are a few things that you can do:
Talk to your lender: Don’t shy away from answering your lender’s calls or calling them yourself. Make sure to explain the situation you are into the lender and request them to provide you time or options, like a longer payment plan, to clear your loan.
Be aware of your rights: Although your lender can repossess the car, they can’t cause any damage to your property and they are legally required to return all your belongings that were present in the car. Don’t get lost in the moment and forget to ask about these things.
Review your budget: While you may want your car back immediately, make sure to take a realistic look at your budget and evaluate if you can actually continue paying the installment for the car every month. If not, it may be time to let the car go.
Buying a Repossessed (Repo) Car in Ireland
Want to buy a repossessed car in Ireland? If you are a buyer looking to purchase a repossessed car in Ireland, it’s important to get as much information as you can about the vehicle. Keep in mind that no two repo cars are exactly the same, and, in most cases, you’ll really have no idea about how well the previous owner maintained the car. That said, you can get the Vehicle History Report of the car from MyVehicle.ie and evaluate the details of the vehicle.
Buying a repo car is not too different from buying a regular used vehicle. So, make sure to get the vehicle inspected by a reputed mechanic you trust and take the vehicle for a test drive. The biggest benefit of buying a repo car is that you can get a pretty good deal on the car if you bid for it right. At an auction, you’ll need to pay the highest price to win the bid, however, you are still likely to end up paying less for it in comparison to what you would pay if you were to buy the vehicle from a seller or used car dealership.
How do I find my repossessed car?
Most lenders will inform you before the repossession happens. That said, you should know that the lender may, at times, hire contractors who will just show up at your residence and tow the vehicle from the driveway. If you’ve missed a few payments and have noticed that your car is missing, make sure to check with your lender.
Is it safe to buy a bank repossessed car?
Yes, provided you check the Vehicle History Report, get the car checked by a mechanic, and take it for a test drive.
How do you buy cars that have been repossessed?
You can buy repo cars at auctions that are held by lenders.
How many months behind can you be on your loan before your car is repossessed?
Want to know how many missed payments before repossession are allowed? It varies from lender to lender, so you will need to check your loan documents to know exactly when the lender will begin the repossession proceedings.
Does repossession affect car value?
The car’s value will depend on how well it has been taken care of. If the repossessed car was maintained well by the prior owner, there will likely not be a big drop in the value.
How long does a car repossession stay on the record in Ireland?
A repossession could stay on your credit record for a few years. It will also remain in the Vehicle History Report of the car permanently.
Justin Kavanagh is a recognised leader in automotive intelligence and vehicle data supply to the entire motor industry. He has almost 20 years experience in building systems from the ground up. As the Managing Director of Vehicle Management System, he understands the need and importance of trustworthy and reliable vehicle history and advice to both the trade and the public.
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