When your car is repossessed, it doesn’t simply disappear into thin air. The lender or repossession agency that seized your vehicle has specific steps they must follow to handle the car going forward. Understanding this process can help you navigate the situation and potentially regain possession of your vehicle.

Where Does the Repossessed Car Go?

Once a car is repossessed, the lender or repossession agency will typically take it to an impound lot or their own storage facility. This is where the vehicle will be held until it is either returned to you or sold at auction. The lender is required to notify you of the car’s location and your rights to retrieve any personal belongings from the vehicle.

What Happens to the Repossessed Car?

In most cases, once the car is repossessed, the lender will sell it either at auction or through a private sale, often to a used-car dealer. The lender is generally required to sell the car in a “commercially reasonable” manner, meaning they must try to get a fair market value for the vehicle.
If the car is sold for less than the remaining balance on your loan, you may still owe the lender the difference, known as a “deficiency balance.” The lender can then pursue legal action to collect this amount from you.
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