Watching your vehicle get taken by strangers can be a heart-breaking experience. It is almost as though you are losing part of yourself. A part of you that used to take you anywhere and everywhere you wanted.

However, you need to take responsibility for the reason that led to the consequence of the repossession.

Repossession, itself, has the negative value of adding bad information to your credit history. If you are lacking in car payments, the vehicle’s financing company is legally obliged to repossess your car – well, ‘their car’, since you still owed money on it. But it is your human right to ensure that upon repossession, you are presented with a court order containing the court’s stamp – by the court’s officer.

Here is what to do, if the bank, from which you are financing the vehicle, or the financing company, comes to repossess your car:
  1. Contact a consumer law attorney
  2. Review your car loan agreement: Your agreement may offer you the right to avoid the repossession, by taking care of error.
So, what happens when your car is repossessed?

If your car is repossessed, a lender will store it and place on car sale in a public car auctioning. After being sold, the sale proceeds goes to the client’s car loan balance. If the proceeds do not cover the balance, the lender has the human right to ask, in writing, for the client to pay back the difference in one lump sum or over a period of instalments.

Despite being repossessed, you could try to get your vehicle back before it gets auctioned off:

  • Buy your car back from the lender: If it is worth more than the outstanding loan balance.
  • Reinstate your car loan: Continue paying the loan, according to the loan agreement.
  • Contact a consumer law attorney: First check your budget.

Avoid repossession of your vehicle. If you cannot pay your car loan back to your financier, sell your car, negotiate with a lender or file for bankruptcy. If your credit has no negative information about missing a loan payment, you can negotiate the terms of your loan with a lender, to a lower monthly installment; but you need to be prepared to pay an increased loan percentage.

If you are worried about your car being repossessed, go for ‘voluntary repossession’. This means giving your car back to the lender. The advantage voluntary repossession is that you do not need to reimburse any costs of repossession, to the lender – apart from storage and sale costs.

Although ‘avoiding repossession’ is something that is easy to just say; in most cases, for owners who have taken out car loans, things do not go the way they thought it would. Therefore, know your human rights when a bank repossession.

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The above information, as retrieved from Debt Busters, is simply a guide and does not change any laws, rules and regulations, as stipulated in the South African National Road Traffic Act or National Road Traffic Regulations.