Negotiating with the Bank: How to Stop Car Reposession

With economic hard times pressing on all of us there are so many stresses on the average persons household budget that it can be easy to fall behind on bills that you've never had trouble with in the past. For a family that has lost one or all sources of income the situation can become even more dire.

The two largest purchases that most people will make in their lifetimes are their home and a car. There has been much said about ways to stop or battle a foreclosure on your home, but many people are also facing a struggle making their car payment each and every month. This is a troubling situation especially for those who have faced a serious job loss, as not having a means for transportation can wreck any chance of finding a new job.

Each bank has its own internal policies on how and when it begins vehicle repossession. Some banks will give you more leeway and allow you to fall further behind then others so there is no set rule. If it's at all possible and you are not yet behind on your car payments, but expect that you will be soon (following a recent layoff) then now is a good time to contact your bank for assistance. Many banks will allow you to extend two or three months of payments onto your loan, in effect they will take your next few payments and add them to the rear of the loan giving you some extra time.

A Word of Warning about talking to the bank.

If your auto loan is through a major auto manufacturer such as Volkswagen Credit, or Ford Motor Credit then asking for an extension and explaining your situation (job loss, etc) isn't much of a problem. However if your loan is through a local bank or credit union, or with a credit card company that you have other revolving credit accounts you may face a difficult situation.

For example, telling a bank that you have other accounts with that you have lost your job may gain sympathy and help you by obtaining an extension on your loan. However it is also very likely that they will then look at your other accounts and reduce your maximum credit limit to the amount of your current balance. While running up credit card and credit line debt when your already struggling isn't a good idea, having the available funds on tap can be a real life saver in certain situations. The last thing you'll want to do is give them any excuse or reason to remove your current credit lines and limits. So in this instance exercise caution in letting them know how bad your situation is and your current job status.

Additional Resources:

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