How to get a car repossessed if you can’t make payments

Until you completely pay off the loan on your car, your lender is the car’s legal owner. If you cannot repay the loan, surrendering your car to the lender may be one way out. If you stop making payments or declare bankruptcy, the lender may repossess your car. However, in some situations, the lender chooses not to repossess the car.

This can happen when the cost to repossess, repair and resell the car is not worth it to the lender. It’s a frustrating situation, but there are a few things you may be able to do.

What happens when your lender refuses to repossess your car?

If you want to surrender the car (as is common in bankruptcy), the lender may refuse to take possession. In addition to cars and trucks, this can happen with motorcycles, ATVs, jet skis and recreational vehicles. Enough people surrender these types of vehicles that the resale value can be low. If it is too low, the lender might not want to waste resources to repossess, refurbish and resell.

Even if the lender won’t repossess the vehicle, they are not legally required to transfer the title to you — including after the statute of limitations has expired. Until you settle the matter, you must foot expenses such as registration and insurance.

3 options if your lender will not repo your vehicle

Here are a few options if your lender won’t repossess your vehicle.

Keep the vehicle and continue to use it

One day, the lender or some collection agency may determine it is worthwhile to pick up the vehicle. Until that happens, keep the vehicle registered and maintain proper insurance. You don’t want to compound filing bankruptcy with a post-bankruptcy car crash. Your liability in an accident will not be part of your bankruptcy case — in other words, it won’t be dischargeable.

With this option, you might be able to keep and drive the car for many more years without receiving its title. But if your financial situation shifts, it’s best to resume making payments to gain complete control of the vehicle.

Park the vehicle and mail in the keys

Another option is to park the vehicle in a secure, public location and send the creditor a copy of the keys via registered mail. The vehicle must be parked in a public location where a tow company can legally access it to repossess it.

Again, you will want to keep your car insurance current until you confirm that the lender has repossessed the car. The risk is that you must confirm that the proper entity, rather than a car thief,  picked up the car.

There are also some practical issues if you pick this option. Specifically, many communities have strict rules about leaving cars on the street. You will need to visit and possibly move the car regularly. Each time you move it, contact the lender again.

Keep contacting the lender

Finally, you can continue to call the lender until you talk someone into picking up the vehicle. This will take a lot of persistence, but eventually, it should get the lender to act. You can try to get the lender’s mailing address. Then, you can mail a formal demand letter notifying them that their vehicle sits waiting to be picked up.

The bottom line

If you have a car that you’re no longer making payments on, the lender still is the legal owner. They can repossess the car, but in some cases, they may choose not to do so. If you’re trying to move on, like from bankruptcy, it can be frustrating to have physical possession of a car you don’t legally own or want.

If you find yourself in that situation, it pays to be persistent. Keep trying to get the lender to pick up the vehicle. This might require numerous phone calls and a calm demeanor as you try to find the right person to help you. In the meantime, keep the registration and insurance information current if you continue driving it.