When you finance the purchase of a vehicle, your ownership is contingent on you making timely payments. If you fall behind, your lender may decide to repossess the vehicle.
The terms of your car loan can give you an idea about when your vehicle could be vulnerable due to your non-payment of the loan attached to it. Some companies will try to reclaim the collateral property for a loan after just a single missed payment.
Repossession will mean you lose the money you’ve invested in the vehicle in many cases. Unfortunately, losing your vehicle will only make your financial situation worse.
Your job could be at risk
When you cannot get yourself to and from work reliably, your employer may take issue with your poor attendance or frequent tardiness. You could face disciplinary action or even be at risk of losing your job. Not having a steady income stream will only make your situation harder to manage, and not having your own transportation will make it harder to find a new job.
Securing a new vehicle is difficult after a repossession
A repossession is a big black mark on your credit history. Your opportunities to finance large purchases will decrease substantially once you have a repossession on your record. You may have no choice but to rely on public transportation, rides provided by friends or rideshare services.
These solutions can be unreliable and expensive, making them less than ideal for someone trying to regain control over their finances. Avoiding vehicle repossession, possibly by filing bankruptcy, can help you prevent your financial situation from getting even worse.