Got Your Car Repossessed? Here’s What You Must Do

Published: April 10, 2018 | Updated: January 20, 2020 | Posted by: Venus Zoleta | Car Insurance

Repossessed Car |

Uh-oh, the bank has just hauled your car away. What to do now?

Losing your car is painful as it is. The hard-earned money you’ve paid for the monthly installments is gone in an instant. Having no car all of a sudden will jeopardize your work or business. It doesn’t help that the miserable state of public transportation in the Philippines doesn’t offer an alternative to car less Pinoys.

What happens next could be very stressful. That’s the ugly consequence of failing to repay your car loan on time. But here are six steps to take after the bank has repossessed your car.

1. Find Out Why the Car Got Repossessed

If you’ve stopped making monthly payments on your car loan, the reason for the repossession is obvious. The bank owns the car until you’ve paid the loan off, so it has the right to take back the car when you default on your loan.
But if you’re updated on your loan repayments, and you believe your car was taken by mistake, contact the bank right away to find out the reason so that you can correct the situation.

Car repossession may happen for reasons other than failure to repay a car loan. The repo guy may have taken the wrong car. There might be some issues (on the bank’s end) with processing your payments, or your account might have been incorrectly tagged as delinquent.

Or worse, it might be a case of the “assume balance” scam. Last year, a guy bought a second-hand car via a Facebook page under a pasalo or assume balance scheme without checking first with the bank that issued the loan, only to get his car repossessed two weeks after.

It turned out that the seller, who was the previous owner, had stopped paying off her loan for a long time, and the car was nearing repossession when she sold it to the victim. In such a case, the only recourse is to file a police complaint against the scammer.

2. Get Your Belongings Back

You have the right to retrieve your personal stuff from the repossessed car. Coordinate with the bank on how you can pick up your belongings. Report to the bank if anything is missing or damaged.

3. Decide If You Can Afford to Recover the Car

repossessed car
“Can I get my car back?” It’s probably the first thing running on your mind after the bank repossessed your vehicle. Yes, you can—but it isn’t going to be easy. You need to act fast and come up with a realistic solution that won’t put you in deeper debt.

Here are three possible options to get a repossessed car back:

  1. Redeem the car. To get your car back, you should pay all the remaining loan balance plus storage and repossession fees before the bank puts it up for sale. The bank may have sent you a notice of sale informing you of the time period and how to redeem the repossessed car.
  2. Restore your car loan. You may be allowed to reinstate your loan by paying the amount you’ve failed to repay plus storage and repossession fees.
  3. Buy the repossessed car back. This may sound like an absurd idea, but if the car has sentimental value to you, it may be worth pushing for it. The bank may allow you to bid on the car when it’s up for sale.

Whether or not to recover your repossessed car is a serious decision to make. If you choose to go ahead with it, be warned that it might strain your finances. You might be tempted to borrow money from relatives and friends, which is a bad idea because you’re just burying yourself deeper in debt.

Take a long and hard look at your financial situation. Your car got repossessed for a reason—you cannot afford the vehicle you purchased. Is taking your car back worth the trouble? Can you manage to get back on your feet again after you retrieve the car? Will your situation improve over time? Give these things a careful thought before you attempt to recover your repossessed car.

4. Decide Whether You’ll Keep or Cancel Your Car Insurance Policy

Should you keep or cancel your car insurance policy when your car is repossessed? The right decision will depend on your insurance type and whether you’ll get the car back or not.

If you have a comprehensive car insurance and the financial means to get your vehicle back, keep your policy active. The insurance may pay for any damage to the car during repossession.

On the other hand, if you have the liability-only coverage and you can’t get the car back, it’s better to cancel the insurance right away rather than pay for it when you’re no longer using the car.

Repossession will increase your insurance rate on your next vehicle as a result of your bad credit history. But you can still reduce the insurance cost on your next car. Do your comparison shopping to find a cheap car insurance online at

5. Just Let It Go

used cars

Photo by Zelda Richardson via Flickr

Rather than spending your money on saving your repossessed car, you might be better off letting it go and just save it up to buy a second-hand car. It’s a tough call, but it can be the only way to get out of a potential financial problem.

This time, be wiser and realistic about your next car purchase, so you’ll never have to experience repossession again. Go only for a reliable vehicle you can afford. Check out this article for tips on buying a used car.

6. Improve Your Bad Credit History

Having your car repossessed puts a dent in your credit history, making it tougher for you to get approved for new loans in the future. But you can turn things around. For example, get a secured credit card, use it responsibly, and pay your credit card bills on time.

Final Thoughts

Ever got your car repossessed? What lessons did you learn? Share your experience and advice below!
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