My car was repossessed - now what?
June 4, 2009 3:26 PM   Subscribe

I've been an irresponsible idiot. My car was repossessed - now what?

I got three months behind on my car loan and the car was, of course, repossessed. I didn't take the situation seriously enough - I kept thinking that I could just catch up and everything would be fine. Of course, if I'd realized that they really would take the car, I'd have dealt with it. I was pretty stupid.

I moved across the country, somewhat messily, at the beginning of the year and didn't get Wachovia's mail or phone calls trying to figure out why I wasn't paying my bills - I understand how this looks to them, that I was hiding and/or avoiding them. The final word from the bank is that I can only get the car back by paying off the entire balance - about $12,500. They will not reinstate the loan in any way - not with a higher interest rate or with a co-borrower, which I suppose is totally reasonable on their part.

I really think getting the car back is the best option - I don't want to tell them to keep it and then owe thousands when they sell it way below market at auction. But I don't have the buyout cash available, and would like to refinance the loan through someone else (they assume the debt, send Wachovia a cashier's check, and I start paying them). I've been calling around, and no one so far (my bank, local credit union, a couple online lenders) will do it. I understand that if I can find someone, even the best-case scenario would be extremely expensive, but can anyone recommend a not-too-sketchy lender that would take on this kind of super sub-prime debt?

Or other ideas on how to handle this situation? I'm not upside down on the car - what I owe is about what it's worth, or a little less (I understand that the interest on another loan will mean that I'll ultimately spend more than the car is worth). In applying for refinancing from one place, they told me they couldn't refinance a repoed car but would issue me a loan for a new car. I was surprised that it was at a not-hideous interest rate. My credit is not great (not actively bad, except for the repo, of course; mostly just an absence of history).

Any ideas?
posted by anonymous to Work & Money (7 answers total) 1 user marked this as a favorite
Go on Craigslist, find a ~$500 beater, drive it the rest of the way into the ground while you find other options to re-finance within your means.
posted by hungrysquirrels at 3:41 PM on June 4, 2009 [2 favorites]

Rather bluntly stated: it will be very hard, if not impossible, for you to find the kind of loan you are looking for. At least without paying usurious rates.

This is doubly true with someone like you, whose car has been repossessed. You are essentially an untouchable risk.

One possible solution for you would be to take out a personal loan from some wealthy person you know, though, even here, many individuals with the money to lend you would be averse to lending to someone whose car has been repossessed.

It goes without saying that paying cash for a car is always preferable to financing it, if that is an option.
posted by dfriedman at 3:44 PM on June 4, 2009 [1 favorite]

Yeah, if you've messed up on a big collateral loan, you're not going to be able to go get another collateral loan any time soon. Also, while you say you're not upside-down on the car, just wait: the bank will probably tack on $2,000 - $3,000 for the cost of repossession, collections, and whatever other interest and late fees they feel like. Now, if you don't come up with a 11th hour reprieve, the car will go to an auction to be sold. There's no way they're going to get $12,500 at the auction: you'll be on the hook for the difference between the $5,000 they get for it and the $12,500 you owe. Giving you the opportunity to pay off the loan and keep the car is actually a better deal than I'd expect them to give you (the recession probably has something to do with it). If you've got family who can lend you that kind of money, or a CD to cash in, or retirement to withdraw, that may be your best bet. If you can find somebody willing to buy the car FROM you for $12,500, you can pay off the loan, but you're still car-less...but more likely to be able to get another loan in the future. If not, it's summer, go find a cheap bike, use the summer to save up to buy an affordable, reasonable car this fall.
posted by AzraelBrown at 4:37 PM on June 4, 2009

You could hunt around for a credit card with a 0% balance transfer, and maybe 0% APY for a year or some promo like that. Use the balance transfer check to pay for the car. Pay the credit card off ASAP. But by the sounds of it your credit may not make this possible to get.
posted by floam at 4:40 PM on June 4, 2009

Seconding most of dfriedman, but with a personal anecdote:

I had a similar situation, but it's probably one of those "case by case" things. In my case, I woke up one morning and the car was gone. Knowing I was behind, I called the credit union and they weren't much help (but at least I knew they had my car!). I did the same thing - searched for days trying to find someone/anyone who would give me another loan. After a while I realized I have to suck it up, and I worked it out with my folks and another bank to buy the car from the credit union.

At this point, your credit report shouldn't have any major flags (unless there's something else out there) so with a *very trusting* relative, you could still buy the car back. In my case, I was able to buy the car back through another bank loan as a co-signer - which added an additional $1200-1500 to the loan due to the crappy rate, btw - and without any damage to my report. I had to pay some fees (not more than $500) for the repo and storage, but about three weeks later, I had my car back. The new loan was for a used car - the repo lot faxed a description and the vital info the bank needed. I've always considered the additional interest and fees my "stupid tax" ever since...

If you're still talking to the bank, they should be interested in resolving this. I'd think it's similar to the mortgage crisis - most lenders would want to keep people in their homes/cars. Maybe I'm too optimistic, but still... I suppose the key thing here is having someone with enough trust and credit to help out - I realize I was pretty lucky. In the end, having a co-signer was the only way I got it back. Best of luck!
posted by serf4luv at 7:20 PM on June 4, 2009

The bank does not want your car about a much as you do. I would make an offer along the lines of this: Offer to pay all the back monthly charges. Pay the repo fees. AND, offer to pay one year in advance or give a one year deposit while you pay regularly each month. THis way, you only have to up front a fraction of the total cost, the bank gets even more security and you both get what you both want with the car. It may take you having to work your way up to someone who is authorized to make that kind of deal and some time. I would even consider putting my offer in writing.
posted by JohnnyGunn at 8:54 PM on June 4, 2009

Call them. Explain your stupidly. Ask them to help you work it our to get the car back. They have every reason to work with you, but will charge you fees.
posted by theora55 at 8:04 AM on June 5, 2009

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