How to Pay Off a Repo

Repossession agents can take your car any time you default on the loan.

Repossession agents can take your car any time you default on the loan.

If you failed to meet the terms of your car loan and had your car repossessed, you will want to pay the remaining amount as soon as possible so you can stop any further damage to your credit. When a lender repossess as a vehicle, it then sells the vehicle at auction to pay for the money you still owe, known as the deficiency. If you don't pay this deficiency the lender can take you to court and try to seize your assets to make up for the missing amount. You can avoid this problem by paying off the repo.

Items you will need

  • Auto loan documents
  • Checkbook

Contact the lender. Many lenders will try to limit their losses by agreeing to accept payment from the borrower. Contact the lender as soon as your car is repossessed and ask how much you will have to pay to make up for the deficiency. The lender might choose to wait until after the auction, at which point you can call again.

Ask about any fees. The lender might include fees for hiring a repossession agent, storing the vehicle, and other costs associated with the repossession process. There could also be a penalty or late payment fee that you must account for before you make your final payment.

Consider a negotiated payment plan. If you are unable to pay for the deficiency with a lump sum payment, your lender might be willing to agree to a new payment plan that lets you make monthly installment payments. Always get these terms in writing before agreeing to any new payment plan.

Make regular payments. If you agree to a plan it's important to make regular payments. Given your history with the lender, missing even a single payment will likely result in the lender taking legal action against you.


  • Consider refinancing the loan. If you can find a lender who is willing to give you a loan at lower rates than the original lender, you can use that refinancing loan to pay off the deficiency and save yourself money with lower interest rates or monthly payments.


  • Don't procrastinate. The longer you avoid paying off the loan, the more fees the lender can charge you and the more you will eventually have to pay off.

About the Author

Roger Thorne is an attorney who began freelance writing in 2003. He has written for publications ranging from "MotorHome" magazine to "Cruising World." Thorne specializes in writing for law firms, Web sites, and professionals. He has a Juris Doctor from the University of Kansas.

Photo Credits

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